Amazon AI revenue hits $14B, chip business tops $20B
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- Amazon disclosed that its AI services generated a run‑rate of about $14 billion, roughly 10 % of AWS’s $142 billion revenue run‑rate, based on first‑quarter performance.
- Amazon shares rose 4.5 % after the announcement, reflecting investor approval.
- Amazon projected $200 billion in capital expenditure for the year, primarily for AI, and Jassy said customer commitments already cover a substantial portion of the 2026 capex.
- Amazon’s custom chip business, including Graviton, Trainium, and Nitro, now reports an annualized revenue run‑rate of over $20 billion, double the $10 billion disclosed previously.
- Amazon indicated strong demand for its chips and said it may sell racks to third‑party customers in the future.
- Microsoft was noted as a rival, reporting its AI business crossed a $13 billion annual run‑rate in late 2024.
Why it matters: Investors gain confidence as Amazon's AI services now generate a $14B run‑rate and its chip unit hits $20B, justifying the $200B capex plan and easing fears of a spending bubble. Competitors such as Microsoft see a comparable benchmark, while Amazon's chip demand creates a new revenue stream beyond AWS.
