AWS Growth Lags Peers as Amazon Plans $50 Billion Chip Spin-Off
AWS revenue grew 28% in Q1 2026 versus Google Cloud's 63% and Azure's 40%, while Amazon and peers spent $130.6 billion on AI infrastructure in the quarter. Amazon will spin off its Graviton and Trainium chip unit as a standalone business targeting up to $50 billion annual external revenue.
1. AWS Q1 Growth Performance
In Q1 2026, AWS reported 28% year-over-year revenue growth, compared with Google Cloud’s 63% and Microsoft Azure’s 40%, underscoring a slowdown in AWS’s expansion despite its market leadership.
2. AI Infrastructure Investment Pressure
Amazon and other tech leaders invested $130.6 billion in AI infrastructure during Q1, driving component costs higher and raising concerns that elevated capex could weigh on near-term profitability.
3. Graviton and Trainium Spin-Off Plans
Amazon plans to spin off its custom Graviton and Trainium chip unit into a standalone business, aiming to leverage internal $20 billion run rates to generate up to $50 billion in annual external revenue once production capacity is scaled.