Amazon Web Services posted a 28% year-over-year surge in net sales to $37.6 billion, marking its fastest growth in 15 quarters and signaling AI-driven demand for cloud infrastructure.

CEO Andy Jassy framed the capital expenditure as short-term cash burn for long-term gains, noting that data centers can last more than 30 years while other assets have 5–6 year useful lives.

Amazon acknowledges investor concerns about high infrastructure spending but expects a similar pattern to prior AWS growth waves, with larger downstream revenue and free cash flow potential in the future.

Free cash flow declined to $1.2 billion for the trailing twelve months, mainly due to a $59.3 billion jump in property and equipment purchases tied to AI-related infrastructure.

The company is increasing capital expenditures to support AWS expansion, investing in land, power, buildings, chips, servers, and networking gear, with capex expected to outpace revenue growth in the near term.

CEO Jassy attributed AWS growth to its compute role for the AI industry and likened current AI-driven expansion to the early days of AWS, signaling a substantial scale-up in AI revenue run rate.

Amazon’s first-quarter results show overall sales growth of 17% to $181.5 billion, with North America up 12% and international sales up 19%.