Amazon Chip Unit Hits $20B Run Rate; AWS Set to Gain from OpenAI Shift
Amazon's custom silicon business reached a $20B annual revenue run rate with 40% sequential growth and could hit $50B annually as a standalone. After OpenAI missed revenue and user targets, AWS may benefit from AI workloads shifting to other cloud partners.
1. Custom Silicon Business Growth
Amazon’s custom silicon division achieved a $20 billion annual revenue run rate last quarter, reflecting 40% sequential growth and positioning it among the top three global data center chip operations. CEO Andy Jassy projected that the unit could generate $50 billion annually if operated independently, though elevated capital expenditures may pressure free cash flow.
2. OpenAI Performance and AWS Opportunity
OpenAI fell short of its 2025 revenue and user growth targets, leading it to explore cloud partnerships beyond its exclusive Microsoft agreement. This development could redirect AI workloads to AWS, boosting Amazon’s cloud segment as competition from Google’s Gemini 3 and Anthropic’s Claude intensifies.