Amazon AWS Grows 28% as Chip Unit Eyes $50 B External Market
Amazon AWS revenue increased 28% year-over-year in Q1 2026, trailing Google Cloud’s 63% and Microsoft’s 40% growth, while AI infrastructure capex is projected to reach $700 billion. The company’s Graviton and Trainium chip unit generates a $20 billion annual run rate with plans to scale to $50 billion externally.
1. AWS Growth Performance
In Q1 2026, Amazon Web Services recorded 28% year-over-year revenue growth, underperforming Google Cloud’s 63% and Microsoft Azure’s 40%. AWS contributed a significant share of overall cloud spending, driven by enterprise demand for AI-optimized infrastructure.
2. Chip Business Expansion
Amazon’s in-house Graviton and Trainium processors support a $20 billion annual AWS compute run rate. The company plans to expand production capacity to offer these chips externally, targeting a $50 billion third-party market once supply meets AWS and external demand.
3. AI Capex Environment
Capital expenditures for cloud service providers are projected to hit $700 billion by the end of 2026 as AI workloads surge. Amazon’s investments in data centers and custom silicon position it to capture growing infrastructure budgets from enterprise AI deployments.