Amazon Targets $700B AWS Capex to Fuel AI, Gears $50B Chip Sales
Amazon is boosting AWS capex toward roughly $700 billion through 2026 to support AI infrastructure, even as timing of ASIC chip orders remains uncertain. Its custom Graviton and Trainium chips have generated about $20 billion in annualized revenue internally and could expand to $50 billion by selling externally once production scales.
1. AWS Capex Ramp-Up
Amazon is scaling AWS infrastructure investment toward $700 billion through 2026 to meet surging AI workload demand, reflecting a doubling of its previous capex guidance. The spend includes data centers, networking gear and specialized AI hardware.
2. ASIC Demand Timing Uncertain
Despite the capex push, timing for procurement of ASIC chips remains unclear due to supply chain constraints and elevated component costs, which have risen 50% this year. This could delay deployment of new AI clusters.
3. Potential Chip Business Expansion
Amazon’s custom Graviton and Trainium chips have driven about $20 billion in annualized internal AWS savings. Management believes external sales could boost revenue to $50 billion once production capacity scales beyond internal requirements.