By Deborah Mary Sophia and Greg Bensinger

April 29 (Reuters) – Amazon.com on Wednesday reported cloud sales growth above Wall Street expectations, driven by strong enterprise spending as companies continue to devote tremendous resources to their artificial ‌intelligence efforts.

Revenue at Amazon Web Services (AWS) jumped 28% to $37.6 billion in the first quarter, compared with analysts’ average ‌estimate of a 25.1% increase to $36.6 billion, according to LSEG. Net sales overall grew to $181.5 billion.

That upbeat performance from its cloud division comes as Amazon – ​the world’s largest cloud services provider – has already boosted investor confidence by deepening its partnership with the two biggest AI firms, OpenAI and Anthropic, within days of each other. The Seattle firm is working overtime to reassure investors that its AI infrastructure spending will generate returns in the near term.

Shares of the company dipped about 1.7% in volatile extended trading after it projected current-quarter operating income ‌between $20 billion and $24 billion, a slightly wider ⁠range on the downside of the current midpoint estimate of $22.62 billion.

For the period ended March 31, capital expenditures were $44.20 billion, up more than 76% from the year-earlier period, and above analysts’ estimate of $41.40 ⁠billion. In February, Amazon projected about $200 billion in such spending for the year, an initial shock to investors.

The roughly $600 billion that Big Tech is expected to pour into AI this year – a historic outlay that has dented cash flows at these companies – is testing investors’ ​patience, ​even as companies say that it is necessary to increase computing ​capacity as strong AI demand outstrips supply.

CEO Andy Jassy ‌said in his shareholder letter this month that much of the company’s 2026 spending will be monetized over 2027 and 2028.

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On Tuesday, Amazon made available all of OpenAI’s latest models and its coding agent, Codex, on AWS, taking advantage of loosened ties between the ChatGPT maker and cloud rival Microsoft.

Last week, Amazon struck a deal to invest up to $25 billion in Anthropic, while the Claude creator committed to spending more than $100 billion on AWS in the next 10 years.

The announcements, coupled with ‌a disclosure earlier this month that AI services at AWS were generating ​more than $15 billion in annualized revenue, have helped push Amazon’s stock up ​some 14% so far this year, putting it among ​the best performers in the “Magnificent 7” group of tech mega-caps.