Amazon's alliance with Anthropic is paying off handsomely for the tech giant's cloud business

Amazon's collaboration with Anthropic is proving to be a major success, with projections indicating substantial growth for the tech giant's cloud division in the upcoming years. According to a recent analysis by Morgan Stanley, Amazon Web Services (AWS) is poised to gain billions in additional revenue from this partnership. Analysts estimate that AWS could see sales reach approximately $1.28 billion in 2025 due to Anthropic's utilization of its cloud services. This figure is expected to rise dramatically, potentially hitting nearly $3 billion in 2026 and an impressive $5.6 billion by 2027 as Anthropic's AI operations expand. The investment in Anthropic, totaling $8 billion, marks Amazon's largest startup investment to date, and the current valuation of that stake has soared to $13.8 billion, as noted in Amazon's recent financial disclosures. Anthropic heavily relies on AWS's cloud capabilities, particularly its Trainium AI chips, which are integral to its operations. Reports suggest that AWS is considering further investments in Anthropic, highlighting the strength of this alliance. Morgan Stanley projects that Anthropic's revenue will increase from $4 billion this year to $10 billion by 2026 and potentially reach $19 billion in 2027. With a gross profit margin forecasted at 60%, the majority of costs linked to these revenues are expected to be directed towards AWS services, particularly for running Anthropic's AI models. Morgan Stanley identifies the partnership with Anthropic as a key driver behind its prediction of accelerated revenue growth for AWS this year. The firm also notes that AWS has maintained a solid growth rate of 16% to 19% annually over the past five quarters, demonstrating the resilience of its core offerings. Additionally, the success of Microsoft Azure, fueled by both AI and non-AI workloads, indicates a growing demand for generative AI infrastructure among enterprises. Morgan Stanley believes AWS could experience a similar trend as businesses ramp up their AI initiatives. The recent CIO survey from Morgan Stanley suggests that Amazon may capture market share from competitors like Microsoft and Google Cloud in the near future, enhancing confidence in AWS's robust positioning. The firm concludes that their new AWS base model could be conservative if Anthropic continues its upward trajectory and if GPU supply constraints are resolved, which would pave the way for accelerated growth in both GPU and non-GPU workloads.