AWS Grows 28%, Amazon Plans $50B Chip Business Launch
Amazon Web Services revenue grew 28% year-over-year in Q1 2026, prompting increased capital expenditures to support AI infrastructure. The company invested $130.6 billion in AI-driven capex in Q1 and plans to commercialize Graviton and Trainium chips, leveraging a $20 billion run rate toward a potential $50 billion business.
1. AWS Growth Drives Capex Increase
AWS posted 28% year-over-year revenue growth in Q1 2026, leading Amazon to boost capital expenditures for data center expansions and AI infrastructure to meet rising customer demand.
2. Record AI Infrastructure Spending
Amazon invested $130.6 billion in AI-focused capex during Q1, contributing to cloud providers’ projected $700 billion spending by year-end to expand processing capacity and data center build-out.
3. Transition to Standalone Chip Business
With internal Graviton and Trainium chips generating a $20 billion annual run rate, Amazon is preparing to sell these processors externally, targeting up to $50 billion in revenue once production capacity is scaled.