Amazon AWS AI Revenue Hits $15B Run Rate; Chip Biz $20B+
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- Andy Jassy released his 2025 annual letter to Amazon shareholders, framing the company's $200B AI spending spree as data-driven rather than a "hunch," explicitly rejecting AI bubble fears
- AWS AI revenue reached a $15 billion annual run rate as of Q1 2026, per Jassy's letter as reported by Reuters and GeekWire
- Amazon's custom chips business is generating $20 billion+ per year with potential to reach $50 billion, and the company is now considering selling those chips to customers outside AWS
- Amazon stock rallied roughly 5% following the shareholder letter and a separate Globalstar satellite deal announcement
- Jassy used the letter to take direct aim at competitors including Nvidia, Intel, and Starlink, positioning Amazon as a challenger rather than just a customer in the AI infrastructure stack
- Modern Retail flagged what Jassy's letter didn't say, while other outlets focused on the capex defense — the chip-as-external-product pivot is the strategic subtext most coverage underplayed
Why it matters: Jassy's letter reframes Amazon from an AI infrastructure buyer into a potential $50B chip vendor competing with Nvidia directly. With AWS AI revenue at a $15B run rate and shares up 5%, the $200B capex bet now has hard revenue attached, giving shareholders cover while putting Nvidia, Intel, and satellite players on notice that Amazon is building the stack it once just consumed.
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