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• Amazon.com (NasdaqGS:AMZN) used its latest annual shareholder letter to highlight over $20b revenue run rate from its in house AI chips, including Graviton and Trainium.

• The company reported triple digit year over year growth in this AI chip segment and is assessing whether to sell these chips directly to external customers.

• Amazon also outlined plans for around $200b of capital expenditures in 2026, supported by large customer commitments in AWS.

For investors, this puts Amazon’s AI chip work front and center, alongside its core e commerce and cloud operations. The move to potentially sell AI chips externally would put Amazon into more direct competition with established semiconductor providers like Nvidia and AMD, while still serving its own AWS data centers.

The planned $200b in 2026 capital spending, tied to customer commitments in AWS, indicates that Amazon is aligning heavy infrastructure investment with contracted demand. If Amazon proceeds with external chip sales, you may want to track how this reshapes relationships with existing chip suppliers, as well as how it fits into the broader role of AI acceleration in cloud computing services.

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3 things going right for Amazon.com that this headline doesn’t cover.

Amazon putting its in house Graviton and Trainium chips at the center of AWS, then floating the idea of selling them directly, is a clear sign it wants to participate in the same AI-infrastructure profit pool as Nvidia, AMD and Intel. For you, the key question is not just the over US$20b revenue run rate that management has highlighted, but how much of future AI spend flows through Amazon as both a cloud provider and a chip supplier. Owning more of the hardware stack can give AWS tighter performance and cost control for its own customers. At the same time, moving into external chip sales would place Amazon in head to head conversations with existing suppliers while it is still reliant on some of their products for high end workloads. This could reshape commercial terms, supply priorities, or partnership depth over time.

• The push into custom AI chips lines up with the narrative that AWS is using vertical integration in silicon, models and tooling to support high margin cloud growth and broader AI adoption across retail, devices and other services.

• The scale of chip and data center spending also highlights the narrative risk that higher capital intensity and rising infrastructure costs could pressure margins if AI demand or pricing does not support the outlay.

• The possibility of selling chips externally and competing more directly with large semiconductor vendors is not a central part of the existing narrative, so readers may want to factor this extra business line into their own expectations.