AWS chips pass $25 billion run rate as cash flow turns negative

Amazon's chip business is not new, but its scale is. The company previously built Graviton, a general-purpose processor used by 98% of the top 1,000 EC2 customers, with revenue commitments up nearly 3x from the prior quarter. That track record gives AWS a template: own the silicon, control costs and supply, and earn higher margins.

Trainium extends that play into AI. Anthropic and OpenAI have both made multi-year, multi-gigawatt commitments, tying their AI plans to Amazon's hardware for years. Uber and Pinterest have adopted it too. The strategy's cost is visible in Amazon's cash flow: data-center spending has pushed free cash flow negative. Whether that is a smart bet or an overreach comes down to how much of the new capacity is already spoken for.

The chip story sits inside a broader AWS acceleration. Sales grew 37% to $42.2 billion, operating income reached $16.6 billion at a 39.4% margin, and customers spent more on Amazon Bedrock than in all prior quarters combined. Advertising added $19.8 billion, up 26%.