Earnings results show that the year-over-year (YoY) revenue growth rate of Amazon’s cloud business AWS has returned to 20%, hitting a nearly three-year high, with annualized revenue climbing to $132 billion.

During the earnings conference call, Amazon CEO Andy Jassy announced that the company expects full-year 2025 capital expenditures to reach approximately $125 billion, with further increases in 2026. The vast majority of these investments will flow into data centers, power infrastructure, and chips required for artificial intelligence (AI).

At the same time, he confirmed news that Amazon will lay off up to 10,000 employees, stating that this decision is based on considerations related to the company’s corporate culture.

Additionally, Jassy addressed analysts’ questions on numerous core topics, including AWS infrastructure capacity, chip strategy, grocery retail business, workforce size, robotics applications, and agent-based commerce. He also disclosed detailed progress updates on various businesses and future plans.

Four Key Highlights from Amazon’s Earnings Conference Call

1. AWS: Dual Focus on Capacity & Chips, AI as Core Growth Driver

  • Infrastructure Capacity: Over the past 12 months, newly added data center capacity exceeded 3.8 gigawatts (GW), with a planned additional 1 GW in Q4. Current capacity is twice that of 2022, and the company plans to double it again by 2027. New capacity is “built and utilized simultaneously” to align monetization speed. The current industry bottleneck is power supply, with future challenges potentially shifting to chips—AWS has made early arrangements to secure supply.
  • Trainium Chips: The Trainium2 business has reached a multi-billion-dollar scale, with quarterly revenue growing 150% and full order book, serving only ultra-large clients like Anthropic. Trainium3 will be previewed by the end of 2025 and enter mass production in early 2026, offering a 40% performance improvement and expanding coverage to more mid-sized clients. Its core advantage lies in 30%-40% higher cost-effectiveness than competing products.
  • Strategy & Growth: AWS adheres to a “self-developed + third-party” chip roadmap, deepening cooperation with NVIDIA while increasing procurement volume. AWS’s 20.2% growth stems from AI businesses (inference, training, etc.) and enterprise cloud migration. Its backlog of unfulfilled orders totals $200 billion, and undisclosed new deals in October exceeded the entire Q3 volume. The AgentCore tool has no direct competitors, with over 1 million SDK downloads, helping enterprises deploy AI agents.

2. Retail: Breaking Ground in Same-Day Grocery Delivery, Parallel Development of Physical Formats

  • Grocery Business: Excluding Whole Foods and Fresh, the annualized transaction volume of Amazon’s grocery business surpassed $100 billion, ranking among the top three in the U.S. Same-day delivery for “grocery + general merchandise” covers 1,000 U.S. towns, with user repurchase rates twice that of non-grocery shoppers. Coverage will expand to 2,300 towns by the end of 2025, reshaping the “weekly stock-up” consumption habit.
  • Physical Stores: Amazon remains committed to exploring physical retail. Whole Foods has achieved faster growth than the industry average, with improved profitability, and plans to open more stores. The small-format “Daily Shop” has launched 3 locations with a strong start, and the company will accelerate its replication in the future.

3. Operations: Flattening Organizational Structure & Automation to Boost Efficiency

  • Workforce Adjustment: This adjustment is not driven by financial factors or AI needs, but by inefficiencies caused by excessive organizational layers from previous expansion. The goal is to “reduce layers and enhance ownership,” returning to a startup-like flat organizational structure and maintaining lean operations in the long term.
  • Robotics Applications: Over 1 million robots have been deployed in Amazon’s fulfillment network to improve safety and efficiency. Future focus will be on “human-robot collaboration” rather than pure replacement. Combined with algorithm optimization to reduce costs, this will support faster delivery and grocery business expansion.

4. Emerging Sectors: Unlocking Potential in AI Agents & Advertising

  • Agent-Based Commerce: Amazon’s proprietary tools—Rufus (250 million annual active users, 60% higher conversion rate) and the “personal shopping” feature—have delivered tangible results. The company recognizes the potential of third-party AI agents but notes existing user experience pain points. It will explore partnerships on the basis of ensuring experience and value exchange, with the long-term goal of making online shopping experiences superior to offline ones.
  • Advertising Business: Amazon is driving growth across DSP (Demand-Side Platform), Prime Video sports advertising, and core advertising. After 20 months of feature enhancements, DSP has unlocked new growth opportunities through partnerships with Roku, Netflix, etc. Leveraging its “full-funnel” advantages and AI tools (e.g., Creative Studio to shorten ad cycles), Amazon is helping advertisers improve return on investment (ROI).