It was 20 years ago that Amazon started a small and somewhat unknown business that changed the face of the technology industry. Now, that company, Amazon Web Services (AWS), pulls in over $128 billion in annual revenues, runs millions of applications across the world, and is at the heart of the global artificial intelligence revolution.
AWS’ 20th anniversary marks another milestone for the company. AI is a huge opportunity and a big threat. The strategy under CEO Matt Garman is to continue investing in AI and stay true to the culture that built cloud computing in the first place: innovation.
The journey from Startup Experiment to Technology Giant
When AWS introduced itself in 2006, it was an innovative idea that many people were struggling to comprehend. Amazon had developed highly advanced infrastructure to support its own online retailing business and chose to deploy this infrastructure to other organisations over the internet.
Businesses could rent computing resources as-needed, rather than buying expensive servers, networking hardware, and storage. This meant that business could avoid large in-house data centers to manage.
At the time, many analysts doubted the feasibility of making the idea a viable enterprise. Cloud computing was still largely unproven, and not many could fathom the significance it would play.
Matt Garman, who was one of the original founders and is now the CEO, says he thought AWS one day would be a billion dollar company. At the time, many colleagues doubted even that lofty prediction.
The reality was much worse than anticipated.
In 2025, AWS recorded around $128.7 billion in revenue, accounting for over $45 billion in Amazon’s operating profit. It started as a home-grown infrastructure initiative and grew to become one of the most successful tech companies ever.
Incorporating an entire industry.
AWS has not just developed a successful business, but an entire new technology category.
Prior to cloud computing, organizations usually would buy hardware, then install software and have their own infrastructure. This approach was very costly and demanding of technical skills.
AWS came with an alternative: infrastructure as a service
Businesses could tap into computing, storage, databases, security, analytics and application services as they needed, without paying for them if they were not being used.
It was very clear that the benefits were soon realized. Startups could get products off the ground without spending millions on infrastructure. Businesses would be able to expand at a better rate. Developers had access to powerful tools without the process of waiting for months to procure hardware.
The pace of adoption picked up and competitors came to the fore.
AWS was followed by Microsoft Azure and Google Cloud, which emerged as one of the most competitive areas in technology.
Cloud computing is the backbone of today’s digital businesses, used from online shopping to streaming media, banking systems to healthcare applications.
The level of competition is greater than ever.
While AWS continues to be the biggest cloud provider worldwide, the competition has become fierce.
AWS accounted for about 32% of the world-wide cloud infrastructure market in early 2020, according to industry estimates. In the 1st quarter of 2026, it was approximately 28%.
In the interim, Microsoft Azure grew its market share from about 18 percent to 21 percent, while Google Cloud’s share went up to about 14 percent from 8 percent.
The figures reflect a maturing market with competitors still pouring massive investments into infrastructure, software services and AI capabilities.
But the cloud market as a whole is still booming, and there’s enough room for a number of providers to thrive.
Amazon Web Services, Microsoft and Google are all not trading off against each other for a finite number of customers, but are all benefiting from an increasing demand for digital infrastructure in almost every sector.
AI Changes Everything
Generative artificial intelligence is the largest technological breakthrough since the emergence of cloud computing.
Many of the capabilities, such as large language models, multimodal AI systems, autonomous agents, and advanced reasoning engines, are very compute-intensive. The processing of huge amounts of data using dedicated hardware at an unprecedented scale is required for training and operating these models.
This gives an edge to cloud providers.
There are not many organisations that have the infrastructure to train frontier AI models on their own. This has led to a growing trend of companies turning to cloud platforms for AI solutions.
This is good news for AWS, as it comes with a challenge.
At the same time, the demand for AI services can lead to higher consumption of cloud resources, leading to significant revenue opportunities. Conversely, rivals like Microsoft and Google have forcefully asserted themselves as major players in the AI space with investments in their own proprietary AI models and strategic partnerships.
Thus, AWS is emerging as a cloud platform and an AI platform as well.
The AI Era Infrastructure Construction
Artificial Intelligence isn’t just about software innovation. It requires exceptional infrastructure.
It takes hundreds of thousands of graphics processing units (GPUs) as well as enormous amounts of electricity to train advanced artificial intelligence systems. These workloads need to be managed efficiently, which requires sophisticated networking, storage and computing architectures.
In response, AWS has heavily invested in dedicated AI infrastructure.
The firm is continuing to build out its global data centre network and create specialised chips for machine learning workloads. These processors are designed to lower costs, enhance performance, and offer customers an alternative to traditional AI hardware.
This strategy is reminiscent of AWS’s past pattern of innovation. Amazon is not just restricted to third-party technology providers but often has its own infrastructure to get performance and efficiency benefits.
Infrastructure innovation is increasingly a key differentiator for AI workloads that are becoming more demanding.
The evolution of cloud computing
AWS has grown significantly beyond being a storage and virtual server solution in two decades.
It now has hundreds of services, including artificial intelligence, cybersecurity, analytics, databases, software development, networking and enterprise applications, and IoT deployments and edge computing.
Cloud vendors are now being treated as strategic technology partners instead of just infrastructure vendors by organizations.
AI is bringing this transformation to a fast pace
Businesses are no longer just looking for computing resources; they are looking for integrated platforms that can help with AI development, deployment, governance, security and automation.
With this move, AWS is becoming the bedrock for organizations to create next-generation AI-driven products and services.
AWS continues to have an edge for several reasons
For a start, it has a wealth of operational experience. The experience gained from handling big cloud infrastructures over 20 years has resulted in deep expertise in reliability, scalability, and security.
Second, AWS is associated with huge developer, technology partner, consulting firm and enterprise customer communities. This network generates strong momentum, which is hard for the competition to recover from.
Thirdly, Amazon’s culture is about the long term, and it’s about experimentation. AWS’s most successful services have been many, and they’ve often come out of attempts to solve internal problems first before they’re released to customers.
This characteristic of innovation after innovation has helped AWS stay relevant in the face of dramatic changes in the technology space.
Looking Ahead
Artificial Intelligence is transforming the technology landscape as radically as cloud did 20 years ago, as AWS celebrates its 30th birthday.
The firm tasked with encouraging businesses to load servers into the cloud now has to make them feel the same way about their AI future.
The task is a difficult one. The competition is tough, customer expectations are growing and AI technology is advancing at an unprecedented pace.
However, AWS has seen transformational moments in the past
It is little known that Amazon experimented with a modest revenue generation through it, but it became the most powerful cloud computing platform in the world and one of the most influential technology platforms of the world. Today, as AI is emerging as the technology of the next decade, AWS is using its own infrastructure, innovation and global scale to stay at the heart of the next chapter in the AI industry.
One thing’s for sure as Matt Garman and his team think about the future: The story of AWS is only just getting started.
