Amazon’s AI revenue hits $15B as web services scales up

Amazon has revealed that its artificial intelligence (AI) services within Amazon Web Services are generating more than $15 billion in annualised revenue, according to CEO Andy Jassy. This marks the first time the company has disclosed financial details for its AI business, which has seen billions of dollars in investment over recent years.

The figure is based on first-quarter performance and represents around 10 per cent of AWS’s total revenue run rate of $142 billion. The update comes after years of anticipation from investors and analysts who have been tracking Amazon’s growing focus on AI.

AWS AI business shows strong growth

According to Reuters, the $15 billion annualised revenue signals that Amazon is starting to generate meaningful returns from its AI investments. AWS remains the company’s most profitable division, and AI is becoming a key growth driver within the cloud unit.

Jassy shared the figures in his annual shareholder letter, where he outlined Amazon’s broader AI strategy. The disclosure reflects growing confidence within the company as it competes with other technology firms in the AI space.

Investment plans focus on AI expansion

Amazon has projected capital expenditure of $200 billion this year, with most of the spending directed towards AI infrastructure. This level of investment has raised concerns among some investors about potential overspending and the risk of an industry bubble.

However, Jassy stated that the company is making calculated decisions rather than speculative bets. He noted that a significant portion of the expected AWS capital expenditure for 2026 is already backed by customer commitments. According to him, much of this investment is expected to generate revenue between 2027 and 2028.

Investors respond positively

Market response to the announcement has been favourable. Analysts view the AI revenue milestone as evidence that AWS is effectively converting demand for AI services into real income.

The update also strengthens Amazon’s position in the competitive cloud and AI market. The company continues to compete with major players such as Microsoft, which reported an AI revenue run rate of $13 billion in late 2024. While both companies use similar metrics, direct comparisons remain limited due to differences in reporting methods.

Custom chips business gains momentum

In addition to AI services, Amazon’s custom chip division is seeing rapid growth. The business, which includes Graviton processors, Trainium AI chips and Nitro networking cards, has reached an annualised revenue run rate of more than $20 billion. This marks a sharp increase from the $10 billion reported alongside the company’s fourth-quarter results.

Amazon is developing its own chips to reduce reliance on external suppliers and manage costs linked to high-demand AI hardware. These efforts align with a broader industry trend, where large technology companies are building in-house processors.

Jassy also indicated that Amazon may eventually sell its chips to third-party customers. He stated that demand for these chips is strong, which could open new revenue opportunities beyond internal use.

Growing demand for AI infrastructure

The latest figures highlight the increasing demand for AI infrastructure across industries. Companies are investing in cloud-based AI tools to support data processing, automation and advanced computing needs.

Amazon’s updates suggest that its long-term investments in AI and cloud infrastructure are beginning to deliver measurable financial results. With strong customer demand and continued capital spending, the company is positioning itself for further growth in the global AI market.