Amazon Plans $50B Standalone Chip Unit After $20B AWS Graviton Run Rate
Amazon's AWS growth slowed to 28% in Q1, trailing Google Cloud's 63% and Microsoft Azure's 40%, intensifying competitive pressures in AI infrastructure. The company is planning a standalone chip business leveraging its $20B internal Graviton and Trainium run rate, targeting $50B annual revenue with external sales once capacity expands.
1. AWS Q1 Growth Lags Competitors
Amazon Web Services reported 28% year-over-year revenue growth in Q1, falling behind Google Cloud's 63% and Microsoft Azure's 40%. This slower pace underscores intensifying competition in AI infrastructure as hyperscale operators ramp up capital expenditures.
2. Standalone Chip Unit Potential
Amazon’s custom Graviton and Trainium processors currently drive a $20B internal AWS run rate. Executives are evaluating a spin-out to sell these chips externally, aiming for a $50B annual revenue opportunity once production capacity meets third-party demand.