Amazon's AI and custom chip divisions have each reached an annualized revenue run rate of $25 billion. The AI unit achieved this milestone in approximately three years, with CEO Andy Jassy noting that its growth rate is several hundred times faster than the early performance of AWS.
The broader AWS cloud segment reported revenue of $42.2 billion for the second quarter of 2026, representing a 37% year-over-year increase and an annualized run rate of $169 billion. The division achieved an operating margin of 39.4% during the period.
Amazon reported a backlog of $496 billion, with demand currently exceeding capacity for 2026 and 2027. To support this growth, the company increased its 2026 capital expenditure guidance to approximately $220 billion, up from the previously projected $200 billion.
The increased investment in AI infrastructure and custom chips, such as the Trainium processor, has impacted cash flow. Amazon reported a trailing twelve-month free cash flow outflow of $7.6 billion. The company has secured agreements with Anthropic and OpenAI for its Trainium chips.
