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Amazon custom silicon business exceeds $10 billion annualized run rate

Wednesday, February 4, 2026 at 07:37 AM

Amazon revealed during its earnings call that its custom chip business, comprising Trainium and Graviton processors, has reached an annualized run rate exceeding $10 billion. The company highlighted that 90% of the top 1,000 AWS customers utilize Graviton CPUs, which offer a 40% price-performance improvement over x86 alternatives, signaling a shift toward internal silicon for AI training and general-purpose compute.

Context

Amazon has officially transformed into a major semiconductor power, with its custom silicon business surpassing a $10 billion annualized run rate. In a significant strategic shift during the latest earnings call, management mentioned its AI-focused Trainium chips 27 times while omitting any mention of Nvidia. This trajectory highlights AWS’s aggressive push to reduce its multi-billion dollar reliance on third-party GPUs by scaling internal hardware specifically optimized for both general cloud computing and generative AI workloads. The success is anchored by the Graviton CPU, which delivers 40% better price performance than comparable x86 processors and is now utilized by 90% of the top 1,000 AWS customers. By vertically integrating its supply chain, Amazon is insulating itself from external chip shortages while capturing higher margins. This milestone signals that custom silicon is no longer a pilot project but a mature pillar of the Amazon ecosystem that directly challenges the market dominance of traditional hardware vendors.

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