If they IPO'd, Bezos would be under humungous pressure to give it all out as dividends. Given his business beliefs, it'll never happen. It's not like they have cashflow problems anyway.

They'll spin it off one day, for the same reason Walmart sold off its massive trucking business.

AWS is eventually going to be a $30 billion sales business, capable of generating $3+ billion in net income. It'll legitimately be a nearly $100 billion market cap company unto itself in ten years. If Amazon is smart, they'll wait until it achieves a much larger scale before spinning it off, it's obviously a huge pot of gold in the equity value.

If they spin it off, it likely wouldn't IPO, Amazon would be the only stock holder. All profits from AWS are already factored into Amazon's stock price, another IPO would be unnecessary