Amazon’s custom silicon business inside AWS reaches a $50 billion annual revenue run rate, growing triple digits year over year.
Amazon’s custom chip division within AWS has reached a $50 billion annual revenue run rate, with $225 billion in commitments, according to remarks on the Q1 2026 earnings call. CEO Andy Jassy stated the business is growing at triple-digit percentages year over year and ranks among the top three data center chip providers globally.
Despite this scale, Amazon’s semiconductor unit remains undervalued, trading at retail multiples rather than semiconductor valuations. NVIDIA, by comparison, trades at a price-to-sales ratio of 20, while Amazon’s chip business receives no premium. The company’s $364 billion AWS backlog and 35x interest coverage provide financial cushion amid a 95% drop in free cash flow due to capital spending.
The market has yet to price in Amazon’s silicon growth, focusing instead on retail margins and competitors like NVIDIA. Analysts note the division’s potential to reshape AWS profitability as demand for custom AI chips accelerates.