Amazon CEO Andy Jassy revealed on the company's first-quarter earnings call in April that its in-house chip business now holds more than $225 billion in revenue commitments for its Trainium AI accelerators. The custom silicon unit, which includes Graviton processors, Trainium chips, and Nitro networking hardware deployed within Amazon Web Services, has an annual revenue run rate above $20 billion and is growing at triple-digit percentages year over year. Jassy noted that if the chip operation were a stand-alone company selling to outside buyers, its revenue run rate would be approximately $50 billion.
A $20 Billion Business Inside AWS
Amazon's chip business grew nearly 40% quarter over quarter in the first quarter alone, according to Jassy, making it "one of the top three data center chip businesses in the world." The $225 billion commitment figure includes major customers: OpenAI has committed to consuming about two gigawatts of Trainium capacity starting in 2027, while Anthropic will secure up to five gigawatts of current and future Trainium chips. Uber uses Graviton processors to match riders with drivers, and Meta Platforms has signed on to deploy tens of millions of Graviton cores. Demand is outstripping supply — the Trainium2 chip, which offers roughly 30% better price-performance than comparable GPUs, has largely sold out. Trainium3, which began shipping in early 2026, is nearly fully subscribed, and much of Trainium4, still over a year from broad availability, has already been reserved.
A Challenger to Nvidia, Within Limits
Nvidia remains far larger, with its GPUs dominating AI data centers. Amazon itself continues to be a major Nvidia customer, announcing plans in the same quarterly report to deploy over 1 million Nvidia GPUs starting in 2026. Trainium's competitive edge lies in cost per computing unit, and Amazon offers its chips exclusively through AWS. Jassy's $50 billion hypothetical figure assumes open-market sales, which the company mostly does not do today. Amazon does not disclose the unit's profits, so investors cannot yet see the full earnings impact. However, the chip momentum sits inside a cloud business that is accelerating: AWS revenue grew 20% for all of 2025, then 24% in the fourth quarter, and 28% in the first quarter of 2026, reaching $37.6 billion — the segment's fastest growth in 15 quarters. AWS also generated $14.2 billion in operating income in the first quarter, up 23% from $11.5 billion a year earlier.
That growth comes at a cost. Amazon expects roughly $200 billion in capital expenditures across the company in 2026, and its trailing 12-month free cash flow dropped to $1.2 billion from $25.9 billion a year earlier as AI investments surged. If demand for AI computing cools before these investments pay off, Amazon's profits and stock could suffer. Still, the stock trades at about $255 per share, roughly 30 times earnings, though that multiple gets a boost from a $16.8 billion pre-tax gain on Amazon's Anthropic investment booked in the first quarter. Excluding that gain, the multiple would be somewhat higher. Shares are up only about 10% this year while AWS accelerates. Ultimately, Trainium does not need to beat Nvidia for Amazon shareholders to benefit — a chip business with a $20 billion run rate, triple-digit growth, and $225 billion in commitments strengthens the investment case for a stock priced at these levels while its biggest profit engine accelerates.