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

Morgan Stanley projects Amazon Web Services (AWS) will generate significant incremental revenue from its partnership with AI firm Anthropic, estimating $1.28 billion in 2025, nearly $3 billion in 2026, and $5.6 billion in 2027, as Anthropic's AI workloads grow. This substantial revenue potential, stemming from Amazon's $8 billion investment in Anthropic now valued at $13.8 billion, is a key driver for Morgan Stanley's forecast of accelerating AWS revenue growth and its expectation that AWS will gain market share in the expanding generative AI infrastructure sector.

Analysis

Morgan Stanley has issued a bullish forecast for Amazon, projecting its AWS division will generate substantial incremental revenue from its partnership with AI firm Anthropic. The analysis quantifies this impact, estimating AWS sales from Anthropic's cloud usage at $1.28 billion in 2025, growing to nearly $3 billion in 2026 and $5.6 billion in 2027. This projection is underpinned by Amazon's dual-benefit strategy: not only securing a major AI workload but also realizing a significant paper gain, with its $8 billion investment in Anthropic now valued at $13.8 billion. This specific catalyst complements AWS's resilient core business, which has maintained a 16% to 19% annual growth rate over the last five quarters. Furthermore, the report suggests a favorable competitive dynamic, citing a recent CIO survey that indicates AWS could gain market share from Microsoft Azure and Google Cloud. Morgan Stanley views its own revenue model as potentially conservative, with upside contingent on the easing of GPU supply constraints and continued hyper-growth at Anthropic.

Key Decisions for Investors

• Investors should consider the Anthropic partnership a material, multi-billion dollar catalyst that could accelerate AWS's revenue growth beyond its already strong baseline, justifying a re-evaluation of forward-looking models for the segment.
• The dual nature of the Anthropic deal, providing both a captive, high-growth revenue stream and significant capital appreciation on the equity stake, should be viewed as a template for Amazon's value creation in the AI sector.
• Monitor AWS's market share relative to Microsoft and Google, as well as GPU supply chain developments, as these are key variables that could determine whether the potentially conservative growth forecasts from Morgan Stanley are met or exceeded.