Amazon’s AWS cloud capacity largely sold out through 2027, CEO says

Amazon and Google signed 20-year deals with Constellation Energy for nuclear power, totaling $4.3B. Amazon secured 690 MW from Calvert Cliffs, while Google's deal covers 11 reactors. Critics question if these agreements will meet data center demand and impact household electricity costs. The Energy Department approved $4.4B in loans for nuclear facilities. Meta, Microsoft, and Amazon have also made significant nuclear power agreements.

Amazon has $5 billion worth of Nvidia AI servers in warehouses due to power shortages in data centers. The company expects to receive $3 billion worth of servers monthly. AWS infrastructure chief Prashant Kalyanaraman stated Amazon's AI business is free cash flow negative and expects it to remain so for a few years. Amazon's free cash flow was negative $7.6 billion for the 12 months ended June 30.

Amazon CEO Andy Jassy stated that AWS cloud capacity is sold out through 2027, with significant demand extending into 2028, driven by AI infrastructure needs. Amazon plans $220B in capital expenditure for 2026, with Jassy suggesting more investment could be justified. AWS services EC2 and Bedrock are key to meeting this demand. Amazon is set to report Q3 results on October 29.

Amazon abandoned plans to build data centers in Loudoun County, Virginia, after facing local opposition. The company agreed to repurpose the 122-acre site for mixed-use and residential development, donating 25 acres and $5 million to the county. Amazon paid $427 million for the land earlier this year. Loudoun County's data centers generate significant property tax revenue, highlighting the impact of local opposition on data center development.

3M (MMM) expanded its deal with Amazon (AMZN) for up to $6B in fiber-optic gear for AI/data centers. 3M shares rose 5% post-announcement. Amazon gets a warrant to buy 3.16M 3M shares at $164.89 each, tied to purchase milestones. 3M also invested in Genius Electronic Optical to scale production. Microsoft (MSFT) is another key partner.

Amazon CEO Andy Jassy stated that AI inference costs are still too high for widespread business use, estimating they are 10 times too expensive. He believes Amazon's own chips, like Trainium, can help reduce these costs. Amazon plans significant capital expenditure, with strong demand for AI infrastructure through 2028. Jassy also mentioned that AI could eventually drive demand in everyday business software. Amazon has secured over $225 billion in future Trainium revenue commitments.