At the recent AWS re:Invent conference, Amazon Web Services' top executive made a surprising admission about the tech giant's strategy while shedding light on the cloud division's robust financial performance driven by artificial intelligence.
A Candid Admission on Amazon's Weakness
During a conversation with the hosts of the Acquired podcast, Ben Gilbert and David Rosenthal, AWS CEO Matt Garman spoke frankly about an area where Amazon consistently struggles. When asked about what Amazon is not particularly good at, Garman did not hold back.
"One of the things that Amazon is particularly bad at is being a fast follower," Garman stated. He elaborated that when the company attempts to mimic competitors, the results are poor. "When we try to copy someone, we're just bad at it."
Instead, Garman emphasized that Amazon's successful formula lies in its foundational approach. The better path, he explained, is to start from first principles to solve a customer's problem, moving forward only when AWS believes it can bring a differentiated solution to the table, rather than merely replicating what already exists.
AI's Pervasive Role and Stellar Financial Results
The discussion naturally turned to the explosive growth of Generative AI and its impact on AWS. When pressed to quantify how much of AWS's business is now related to AI, Garman noted that it is becoming increasingly difficult to measure. This is because AI is now being embedded into virtually every service and solution the platform offers.
This deep integration is reflected in the company's impressive financial results for the third quarter of 2025. Amazon reported that revenue from its cloud computing arm, AWS, surged by 20% to reach $33 billion, a figure that exceeded the expectations of market analysts.
The division's operating income also saw a significant rise, increasing by 9% from the previous year to $11.4 billion. This profit accounted for approximately two-thirds of Amazon's total operating profit for the quarter. Amazon CEO Andy Jassy highlighted that "AWS is growing at a pace we haven't seen since 2022," pointing to strong demand in both AI and core infrastructure areas.
Heavy Investment in AI Capacity
The company's financial commitment to securing its position in the AI race is substantial. Amazon's Chief Financial Officer, Brian Olsavsky, indicated that full-year capital expenditures are expected to be around $125 billion, with plans for even higher spending in the following year.
A significant portion of this investment is directed toward AI projects. In the first nine months of the year alone, the company had already allocated $89.9 billion in capital expenditures, largely to accelerate AI capacity and infrastructure.
This strategic focus underscores AWS's commitment to leading the next wave of cloud innovation through unique, customer-centric solutions rather than following in the footsteps of its competitors.
