AWS Grows 28% As Amazon's Chip Unit Eyes $50B External Market
Amazon AWS grew 28% in Q1 2026 while Google Cloud outpaced it with 63%, underscoring cloud competition. Amazon’s custom chip unit has a $20 billion AWS run rate and could hit $50 billion externally if production scales as providers plan $700 billion in AI infrastructure spending.
1. AWS Growth Performance
Amazon Web Services reported 28% year-over-year revenue growth in Q1 2026, trailing Google Cloud’s 63% expansion and Microsoft Azure's 40%, highlighting intensifying competition for AI infrastructure workloads.
2. Industry AI Capex Trends
Cloud service providers have committed roughly $700 billion in AI infrastructure spending this year, with Amazon, Google, Microsoft and Meta allocating $130.6 billion in the first quarter alone while memory chip costs surge and component shortages mount.
3. Custom Chip Business Outlook
Amazon’s in-house Graviton and Trainium units generate a $20 billion annual run rate through AWS operations; management projects potential $50 billion revenue by selling externally once production capacity expands beyond internal demand.