Amazon’s chip business could be worth $50 billion, Jassy says, and he hints it may sell them externally
April 9, 2026 – 6:30 pm
In short:
Andy Jassy’s annual letter to shareholders, published on 9 April 2026, reveals that Amazon’s custom chip business, covering Graviton, Trainium, and Nitro, generates more than $20 billion in annualised revenue growing at triple-digit rates year-on-year. If sold on the open market like Nvidia, Jassy says, the business would be worth roughly $50 billion a year. He also signals that Amazon may begin selling those chips directly to third parties, and defends the company’s $200 billion capital expenditure plan for 2026 as grounded in committed customer demand rather than speculation.
“Not on a hunch”: the $200 billion bet
Jassy opened the letter’s financial argument with a direct rebuttal of the scepticism that has surrounded Amazon’s capital commitments.
"We’re not investing approximately $200 billion in capex in 2026 on a hunch,"
he wrote.
“We’re not going to be conservative in how we play this. We’re investing to be the meaningful leader, and our future business, operating income, and free cash flow will be much larger because of it."
The context for that claim is a company that saw its free cash flow fall from $38 billion to $11 billion last year, driven by a $50.7 billion increase in capital spending, the bulk of it committed to AI infrastructure.
The defence rests on customer commitments already in place.
Of the CapEx expected to be deployed in 2026, Jassy said a substantial portion already has customer backing, citing as one example OpenAI’s commitment of more than $100 billion to AWS. That commitment, which expanded an existing $38 billion seven-year partnership struck in November 2025, also includes OpenAI consuming approximately two gigawatts of Trainium capacity through AWS infrastructure.
SoftBank, which holds a majority stake in OpenAI and has been financing its infrastructure build through mechanisms including a $40 billion bridge loan, is in effect underwriting part of the demand that Jassy is now pointing to as validation for his CapEx stance.
A $50 billion chip business hiding in plain sight
Amazon’s custom silicon programme spans three product lines:
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Graviton: a custom CPU that Jassy says delivers more than 40% better price-performance than comparable x86 processors, the market that Intel and AMD dominate. It is now used by 98% of the top 1,000 EC2 customers.
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Trainium: the AI training and inference accelerator that represents Amazon’s most direct response to Nvidia. Trainium2, which Jassy says offers roughly 30% better price-performance than comparable GPU alternatives, has largely sold out.
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Trainium3: launched in early 2026, offering a further 30 to 40% improvement in performance