Amazon’s Jassy Discloses $15 Billion AI Revenue Run Rate, Hints at Future Chip Sales
Quick Reads
- Amazon CEO Andy Jassy disclosed that the company’s AI services at AWS are generating an annualized revenue run rate of over $15 billion in the first quarter of 2026.
- Amazon’s custom chip business, including Graviton processors and Trainium AI chips, has doubled its annualized run rate to over $20 billion from $10 billion.
- Jassy signaled that Amazon may eventually sell its chips to third parties, hinting at a potential new business line.
- Amazon shares rose 1.6% in early trading as the disclosure eased investor concerns about the company’s $200 billion capital expenditure plan.
Amazon CEO Andy Jassy, in his annual letter to shareholders on Thursday, revealed that the company’s AI services at Amazon Web Services are generating more than $15 billion in annualized revenue, offering investors a first look at the numbers behind the tech giant’s massive AI push.
Shares of Amazon rose 1.6% in early trading following the disclosure, which comes after the company projected in February that its capital expenditures would reach $200 billion this year, primarily targeting AI development and infrastructure. That figure had unsettled investors and raised concerns about a potential industry bubble.
“We are willing to make large capex investments and endure short-term FCF headwinds for the substantial medium to long-term FCF surplus,” Jassy wrote in the letter. “AI is a once-in-a-lifetime opportunity where the current growth is unprecedented and the future growth even bigger.”
This is the first time Amazon has disclosed specific revenue figures for its AI business, which the company has backed with major investment to compete with rivals including Nvidia, Microsoft, and Google.
Jassy also disclosed that Amazon’s custom chip business is growing rapidly. The company’s chip division, which includes Graviton processors, Trainium AI chips, and Nitro networking cards, has doubled its annualized revenue run rate to over $20 billion, up from the $10 billion the company disclosed alongside its fourth-quarter results.
The CEO hinted that Amazon may eventually begin selling its chips to other companies, a move that would put it in more direct competition with Nvidia, which currently dominates the AI chip market. “There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future,” Jassy said.
Citron Research, in a post on X, called Amazon’s chip business “another trillion-dollar company hidden inside Amazon” and set a $300 price target on the stock. The research firm added that “if our chips business was a stand-alone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion.”
The disclosures come as large tech firms increasingly make their own chips to reduce dependence on Nvidia, whose graphics processing units have become the industry standard for AI workloads. Amazon’s Trainium chips are designed specifically for training and running AI models, positioning the company to capture more of the value chain in the rapidly expanding AI market.
Market Snapshot
- Amazon AI services run rate: >$15 billion annually (Q1 2026)
- Amazon chip business run rate: >$20 billion annually (doubled from $10 billion)
- Projected 2026 capex: $200 billion (primarily AI infrastructure)
- Amazon shares: Up 1.6% in early trading
- Citron Research price target: $300 per share
