AWS CFO says AI investments pay off in under three years, easing bubble fears

Fears of an "AI bubble" are growing among investors as debt piles up, valuations stay high and circular financing deals multiply. Many worry that companies' revenue growth may not keep pace with massive infrastructure spending.

According to Axios, Amazon Web Services (AWS) CFO John Felton said the boom in AI infrastructure and service spending is sustainable. He believes the mature way to view AI is as a productivity tool, not just a cost-cutting tool, and noted that AWS's AI server investments pay off in less than three years.

As of Q2, AWS holds nearly $500 billion in backlog, backed by industry giants, top AI labs and small businesses. AWS revenue hit $42.2 billion in Q2, up 36.7% year over year, while its AI business annualized revenue run rate topped $25 billion, growing at triple-digit rates.