Amazon to Spend $700B on AI Infrastructure, Plans $50B Chip Business
Amazon is ramping cloud infrastructure capital spending to $700 billion through 2026 to support AI, though precise timing for ASIC orders remains uncertain. AWS grew 28% in Q1 2026 and Amazon plans to commercialize Graviton and Trainium chips, targeting $50B annual third-party revenue from a $20B internal run rate.
1. Capital Expenditure Surge
Amazon has announced plans to boost its cloud service provider capital expenditures to $700 billion through the end of 2026. The increase aims to expand data center footprint and AI infrastructure, although the exact timing for ordering custom ASICs has not been finalized.
2. AWS Revenue Performance
Amazon Web Services reported 28% year-over-year revenue growth in the first quarter of 2026, reflecting continued demand for cloud computing and AI services. This growth rate trails Alphabet’s Google Cloud but underscores AWS’s scale and its role in Amazon’s operating income.
3. Chip Commercialization Initiative
Amazon is preparing to offer its in-house Graviton and Trainium chips to external customers, transitioning from an internal $20 billion annual run rate to a targeted $50 billion third-party sales business. The move will require scaling production capacity, with rollouts expected once supply lines are secured.