Amazon Bets on AI Agents as Future Customers Driving Growth

Amazon CEO Andy Jassy emphasized the company's shift toward catering to AI agents as a new class of customers during its Q2 earnings call. These "non-human" patrons, capable of autonomous purchasing decisions, represent a significant evolution from Amazon's early days as an online bookseller.

AWS Positions Itself as the Home for AI Agents

Jassy confirmed Amazon's ambition to lead in agentic AI development, addressing challenges enterprises face in deploying AI agents securely and at scale. Key initiatives include:

• Strands: An open-source toolkit for building AI agents.
• AgentCore: A serverless runtime providing memory, identity, and observability for agents, dubbed the industry's first scalable solution.

Wall Street Skepticism and Jassy's Response

Analysts questioned whether Amazon lags behind Microsoft and Google, which have partnered with OpenAI and Anthropic. Jassy countered:

• "It is so early in AI... We have more demand than capacity."
• AWS leads in security, service breadth, and reliability.
• Power availability, not chips, is the primary constraint on AI expansion.

Consumer AI: Alexa+ Gains Traction

Amazon's Alexa+, a Gen AI-powered upgrade, is now in early access for U.S. households. Jassy reported:

• Improved multi-step task handling (e.g., adjusting lights, music, and thermostats).
• Higher engagement, potentially unlocking new ad or subscription revenue.

Financial Highlights and Tariff Concerns

Q2 2025 Results:

• Net sales: $167.7B (+13% YoY).
• Operating income: $19.2B (+31%).
• AWS revenue: $123B annualized run-rate (+17.5%), though margins dipped to 32.9%.

Jassy addressed U.S.-China tariffs, noting no immediate demand impact but cautioning that pre-deadline inventory purchases may obscure future cost pressures.

Looking Ahead

Amazon projects Q3 revenue of $174B–$179.5B and operating income of $15.5B–$20.5B. Jassy framed AI's potential by asking, "How often do you have a $123B opportunity that’s still early?"

The takeaway: Amazon is betting big on AI agents—not just as tools, but as the next wave of customers driving long-term growth.