Amazon’s Andy Jassy sees a $1 trillion cloud built on businesses like the PGA Tour—which swapped its server trucks for AI broadcasts 

Not long ago, the PGA Tour shipped its own servers on trucks around the country. That means every week, employees loaded up racks of computer equipment and scoreboards, hauled it to golf courses in new cities, unloaded, rigged it together, and ran the tournament’s data operation before tearing it down and rebuilding it again on another course. 

“The PGA Tour is a traveling circus,” said David Provan, the tour’s vice president of digital architecture. “We don’t play inside a set of white lines.”

The golf tour’s old setup is a small-scale illustration of a pattern that Amazon CEO Andy Jassy predicts will shift in increasingly large numbers over the next two decades. Jassy told investors on Thursday’s second-quarter earnings call that about 85% of global IT spending is currently for on-premise company servers, an equation that “is going to flip in the next 10 to 20 years,” he said. 

Amazon’s Q2 results, fueled by a soaring growth from Amazon Web Services, show the acceleration is happening faster than expected. AWS revenue hit $42.2 billion in the second quarter, a 37.6% jump from a year earlier, the division’s fastest growth rate in 18 quarters, and the fifth consecutive quarter of acceleration. AWS added more than $4.6 billion in revenue sequentially—about 80% more than its previous largest quarterly increase ever—and is now running at a $169 billion annualized clip. Customer backlog stands at $496 billion, and Amazon’s stock is surging on the results, up more than 15% on Friday.

The PGA Tour, which is sponsored by AWS and signed a new agreement during Amazon’s first quarter, illustrates the mechanism behind the massive acceleration. Companies are moving their existing infrastructure into the cloud, and then from there, stacking their AI on top of it. The result is a flywheel that explains AWS’ staggering growth and why Jassy told analysts on Thursday that he now believes AWS will “very possibly be a $1 trillion annual revenue business for us in time.”

Investors are eating it up, despite Jassy telling the world Thursday that Amazon’s capital expenditures will actually........

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