Amazon’s Record AI Profit and Cloud Growth Meet Canadian Streaming Tax Threat

Amazon's Anthropic stake generates $16.8B profit, AWS revenue jumps 28%, but Canadian regulators propose tripling streaming levy on foreign platforms.

Amazon is riding two very different waves this spring. Its bet on artificial intelligence startup Anthropic has generated a $16.8 billion paper gain, while cloud revenue accelerates at a double-digit clip. Yet on the other side of the border, Canadian regulators are proposing to triple the streaming levy on foreign platforms, adding a fresh layer of cost to the company’s media operations.

The Anthropic investment delivered the single biggest earnings jolt of the first quarter. Institutional investors took notice: Bill Ackman’s Pershing Square bought roughly 1.84 million Amazon shares, making the stock the fund’s second-largest holding. The conviction is that generative AI will turbocharge Amazon Web Services, and the latest numbers back that view.

AWS posted quarterly revenue of $37.6 billion, a 28% jump from a year earlier and an acceleration from the prior quarter’s 24% growth. The backlog has swelled to $364 billion, and that figure excludes pending megadeals from partners such as Anthropic. Meanwhile, Amazon’s in-house chip division is already generating an annualized revenue run rate above $20 billion. The Trainium2 and Trainium3 chips are sold out, and reservations for the yet-to-launch Trainium4 are opening 18 months ahead of schedule.

CEO Andy Jassy pegged the company’s total AI-related revenue at more than $15 billion annually. To sustain that momentum, Amazon plans roughly $200 billion in capital expenditure for 2026, with the bulk directed at cloud infrastructure and its satellite internet project, Amazon Leo, which is expected to start generating revenue in the third quarter of next year. The advertising business, while growing a solid 22% to $17.2 billion in the first quarter, is increasingly seen by analysts as a supporting act rather than the main event.

Wall Street remains bullish. Wells Fargo this week reiterated an “Overweight” rating, and the highest price target among analysts sits at $370 – about 40% above the current level. The stock has rallied more than 38% since hitting its 52-week low in February and now trades with a relative strength index near 70, a zone that typically signals overbought conditions. On Thursday, Amazon shares closed at €231, up 19.49% year to date and 28.29% over the past twelve months.

The good news is not unalloyed. Canada’s media regulator, the CRTC, has proposed raising the mandatory contribution from foreign streaming services to 15% of local revenue, up from 5%. The levy is aimed at financing Canadian programming, producers and artists. For Amazon Prime Video, the change would mean a tripling of its financial obligation in the country, turning what was a cultural compliance cost into a material margin line item.

The Canadian proposal fits a broader pattern. Regulators in multiple jurisdictions are pressing Big Tech for contributions that go beyond traditional taxes – covering culture, infrastructure and local investment. Amazon is already dealing with similar demands elsewhere: in Germany, the company has announced water replenishment projects that aim to return nearly 370 million liters annually to communities. At the same time, AWS expanded its Bedrock platform in mid-May with new prompt-optimization tools and migration capabilities across several regions.

A separate report on tax incentives noted that Amazon received $17.5 billion in subsidies in 2025, roughly 10% of all U.S. federal tax breaks granted to publicly traded companies. The numbers underscore the scale at which the company operates – and the scrutiny that comes with it.

The Canadian streaming levy is unlikely to be a dominant near-term earnings driver. But the direction of travel is clear: national markets want global platforms to shoulder a bigger share of local costs. If the CRTC’s proposal is adopted, Amazon’s regulatory complexity in the streaming space will increase – and other countries may take a closer look at similar models. For now, the market’s attention is fixed on the AI machine that is humming louder than ever.