Amazon to boost cloud capex to US$700 B, eyes $50 B chip business
AMZN•Amazon is accelerating cloud infrastructure capex to around US$700 billion by year-end, having spent $130.6 billion on AI projects in Q1 and contending with uncertain ASIC sourcing timelines. AWS revenue grew 28% in Q1, and Amazon plans to commercialize its Graviton and Trainium chips into a potential $50 billion external business.
1. Infrastructure Capex Target
Amazon plans to boost its cloud infrastructure capital expenditures to about US$700 billion by the end of 2026 to build new AI-optimized data centers and support advanced workloads.
2. Q1 AI Spending and ASIC Timing
The company allocated $130.6 billion to AI-related projects in the first quarter, but timing of critical ASIC deliveries remains unclear while global chip shortages persist.
3. AWS Q1 Revenue Growth
AWS revenue increased by 28% year-over-year in Q1, lagging behind Google Cloud's 63% and Azure's 40% growth but maintaining strong double-digit expansion.
4. Prospects for Standalone Chip Business
Amazon is evaluating a standalone spin-off of its Graviton and Trainium chips, leveraging a $20 billion internal run rate and targeting up to $50 billion in annual external sales once production capacity scales.
