AWS Cloud Largely Sold Out Through 2027 Amid Surging AI Demand

Amazon announced that most of its AWS cloud capacity has already been sold out through 2027. Amazon CEO Andy Jassy said on the 23rd (local time) that supply at Amazon Web Services (AWS), a cloud service that rents out servers and storage over the internet, cannot keep up with the surge in artificial intelligence (AI) demand. He made the remarks in a video podcast with Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz, and general partner Erik Torenberg. Jassy explained that demand from AI labs and enterprises is outpacing Amazon's ability to supply.

The sold-out window extends beyond 2027. Jassy said most of the 2027 supply capacity is already reserved, the 2026 capacity is completely sold out, and a significant portion of 2028 capacity has also been contracted. He added, however, that a certain amount of capacity is being set aside for on-demand services and offerings such as Bedrock and EC2. EC2 is an AWS service that provides cloud servers to run applications, while Bedrock offers AI models so customers can build generative AI applications.

Amazon said earlier this year that it plans to spend about $220 billion in capital expenditures (CAPEX) in 2026. Given that 2026 cloud capacity is already sold out, Jassy said the company "could invest a lot more, and it still wouldn't be a bad use of capital."

The demand boom is also affecting the memory market. Jassy noted that the situation requires allocating memory supply, including HBM and DRAM. Bank of America forecasts global data center investment will grow from $1 trillion this year to $2.1 trillion in two years.

The contract sizes or order backlog underpinning the "sold out" claim, however, were not disclosed. Amazon is set to report its third-quarter earnings on the 29th.