Amazon AWS Revenue Up 28%, Plans $50B Third-Party Chip Business
Amazon Web Services revenue rose 28% in Q1 2026, lagging Google Cloud’s 63% and Microsoft Azure’s 40% growth. Amazon’s custom Graviton and Trainium chips produce a $20 billion internal AWS revenue run-rate and could scale to $50 billion through third-party sales, while major tech firms invested $130.6 billion in AI infrastructure during Q1.
1. AWS Growth Performance
Amazon Web Services posted 28% year-over-year revenue growth in Q1 2026, trailing Google Cloud’s 63% and Microsoft Azure’s 40% gains. The slower pace highlights competitive pressure in the cloud market and may prompt Amazon to accelerate feature development and pricing adjustments.
2. AI Infrastructure Spending Impact
Major technology firms collectively invested $130.6 billion in AI infrastructure during Q1, driving record demand for cloud compute and storage. Rising component costs—particularly memory chips up 50% in price—are increasing capex and may compress Amazon’s AWS margins if not offset by efficiency gains.
3. Chip Business Expansion Plans
Amazon’s internally used Graviton and Trainium chips have generated a $20 billion AWS revenue run-rate, underpinning its cloud operations. The company is evaluating broader production capacity to sell these chips externally, targeting up to $50 billion in annual revenue from a standalone chip business.