No fear of capacity bottlenecks! Amazon’s annualized AI revenue exceeded $15 billion in the first quarter, with the scale of its self-developed chips doubling to $20 billion.

No fear of capacity bottlenecks! Amazon’s annualized AI revenue exceeded $15 billion in the first quarter, with the scale of its self-developed chips doubling to $20 billion.

Amazon CEO Andy Jassy disclosed in his annual shareholder letter released on Thursday that the commercial returns on the company's AI strategy are accelerating across the board: chip business annualized revenue exceeds $20 billion, AWS cloud business AI revenue annualized run rate surpasses $15 billion—both figures are being publicly revealed by the company for the first time.

Jassy stated that AWS's AI revenue is still "climbing rapidly," and if not for the compute capacity bottlenecks faced by the entire tech industry, the overall growth of the cloud business could have been even faster. He also reiterated that the company is willing to endure short-term free cash flow pressure in exchange for substantial mid-to-long-term surplus.

Amazon’s chip business (covering the Graviton, Trainium, and Nitro series) has doubled its annualized revenue from the $10 billion announced earlier this year to over $20 billion, with year-on-year growth reaching triple digits. Jassy wrote in the letter: “Having a highly sought-after, self-developed AI chip opens up many possibilities, perhaps the most important of which is reducing costs for customers and creating better economic benefits for AWS.”

In February, Amazon announced that its capital expenditure will reach about $200 billion in 2026, mainly for AI infrastructure construction. The announcement sparked some investor concern. In Thursday’s letter, Jassy responded to this, emphasizing that most of the spending directed to AWS will be monetized between 2027 and 2028, stating, “We have received customer commitments for a substantial proportion of this spending.”

Chip business: Annualized revenue could reach $50 billion if operated independently

Amazon’s chip business’s current $20 billion annualized revenue does not fully reflect its actual output scale. Jassy pointed out in the shareholder letter that if the chip business were operated independently, and if the chips produced this year were sold to both AWS and third-party customers—like other major chip manufacturers—its annualized revenue could reach about $50 billion.

Demand is also showing a very strong boom. Trainium2 chips are almost sold out, Trainium3 production capacity is nearly fully booked, and Trainium4 has some capacity pre-secured. Jassy said that selling full racks of chips to third parties is “quite likely” in the future.

AWS AI revenue formally disclosed for the first time

For the first time, Amazon officially disclosed the direct financial returns of AWS cloud business AI in this shareholder letter: In the first quarter of 2026, AWS AI revenue annualized run rate has exceeded $15 billion. This is Amazon’s most direct quantitative statement on the commercial transformation of its AI investments so far.

AWS’s total revenue in 2025 was $128.7 billion, an increase of about 20% year-on-year. The market expects its 2026 sales to reach $142 billion. Jassy previously told Reuters he expects AI to drive AWS's annual sales to eventually reach $600 billion, doubling his prior estimates.

Expansion of logistics, grocery, and satellite internet businesses in full swing

Beyond AI, Amazon’s various business lines have also made important progress. In logistics, the company has committed over $4 billion to expand its rural delivery network, and the number of robots operating in fulfillment centers has exceeded one million units.

In retail and groceries, Amazon’s grocery business’s total sales exceeded $150 billion in 2025; its rapid delivery service Amazon Now is beginning to expand into the US and European markets.

In satellite internet, “Project Kuiper” has more than 200 satellites currently in orbit, with commercial launches scheduled for mid-2026. The company has received substantial income commitments from enterprise and government customers.

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