Amazon Eyes $50B Chip Unit Spin-Off After 28% Q1 Cloud Growth
Amazon Web Services posted 28% year-over-year revenue growth in Q1 2026 and its Graviton and Trainium chips drove a $20B internal run rate. The company is evaluating an external chip division launch to boost chip sales toward a $50B annual revenue potential.
1. AWS Posts 28% Q1 Revenue Growth
Amazon Web Services generated a 28% year-over-year revenue increase in the first quarter of 2026, driven by strong enterprise demand for cloud and AI infrastructure. This growth rate places AWS behind Google Cloud’s 63% surge but ahead of Microsoft Azure.
2. $20B Internal Chip Run Rate
Amazon's custom Graviton and Trainium processors power its cloud data centers and have achieved a combined internal revenue run rate of $20 billion, reflecting their critical role in cost optimization and performance enhancements across AWS services.
3. Evaluation of External Chip Spin-Off
Company executives are assessing the viability of offering Graviton and Trainium chips to third-party customers as a standalone business. Successful external sales could drive annual chip revenues toward $50 billion, contingent on scaling manufacturing capacity beyond AWS’s internal needs.