Amazon’s cloud computing business is experiencing its fastest growth in nearly four years, driven by surging demand for AI solutions, enterprise cloud adoption, and new innovations like Bedrock and Kiro. Amazon President and CEO Andy Jassy discussed fiscal first quarter 2026 fast-growing AI revenue, Trainium and Graviton chip advances, and increasing customer preference for AWS’ secure, scalable, and diverse agent offerings.
Amazon Web Services is growing at its fastest rate in 15 quarters, and Amazon President and CEO Andy Jassy said he sees no end in sight to that fast growth.
Jassy, in his prepared remarks during Amazon’s first fiscal quarter 2026 financial conference call Wednesday, told financial analysts that Amazon Web Services is now a $150 billion annualized revenue run rate business.
“It’s very unusual for a business to grow this fast on a base this large,” he said. “For the last time we saw growth at this clip, AWS was roughly half the size.”
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Jassy also said he has never seen a technology grow as rapidly as AI has.
“Amazon is already a leader, and companies continue to choose AWS for AI,” he said. “To put our growth in perspective, three years after AWS launched, it had a $58 million revenue run rate. The first three years of this AI wave, AWS AI revenue run rate is over $15 billion, nearly 260 times larger.”
Customers are choosing AWS for AI for multiple reasons, Jassy said. First is AWS’ broader capabilities than those of its competitors, including model building with SageMaker to reduce training time by up to 40 percent and high-performance inference using Amazon Bedrock’s selection of frontier models.
“We’re excited to make OpenAI’s models available in Bedrock,” he said. “Yesterday we added OpenAI’s GPT-5.4 model, with 5.5 coming soon. Yesterday, we also started the preview of Amazon Bedrock managed agents powered by OpenAI, the stateful runtime environment that enables any organization to build generative AI applications and agents at production scale. We believe that modern agentic applications will be stateful and this new technology will rapidly accelerate agentic AI adoption. OpenAI has said they’re already seeing unprecedented demand for this new product, and we’re seeing heavy customer interest as well.”
Most of the value companies derive from AI will be through agents, and AWS customers are building agents using AWS’ Strands Agents with their proprietary data, Jassy said. Customers have downloaded Strands more than 25 million times, and in the first fiscal quarter it was downloaded three times more than the prior quarter, he said.
Customers can deploy agents with enterprise scale, security, and reliability using Bedrock AgentCore, which Jassy said is being used to deploy an agent as frequently as every 10 seconds.
“We also offer turnkey agents for coding, software migrations, business operations, and knowledge workers in Kiro, Transform, Connect, and Quick, and they continue to resonate with customers,” he said. “The number of developers using Kiro more than doubled quarter-over-quarter, and enterprise customer usage increased nearly 10x. Customers have used Transform to save over 1.56 million hours of manual effort when migrating and modernizing their workloads. The number of new customers using Quick has grown more than four times quarter-over-quarter, and we just announced V1 of our Quick desktop app yesterday. It’s very compelling as it can query your email, calendar, Slack, local files, and several other applications you use every day to flag important communications, retrieve and summarize information, make recommendations, compose and send communications to others, and create agents that highlight or automatically do work that you used to have to do yourself.”
Another reason enterprise customers choose AWS is that, as they expand their use of AI, they want their inference to reside near their other applications and data, and much more of it resides in AWS than anywhere else, Jassy said.
“As customers expand their AI usage, they also want to consume additional non-AI services, and they’re choosing AWS because we built the broadest and most capable core offerings by a wide margin,” he said. “We offer thousands of features across compute, storage, databases, analytics, security and more. … [And] AWS has the strongest security and operational performance of any AI and infrastructure provider.”
AWS’ chips business continues to grow rapidly and is larger than what a lot of folks realize, Jassy said. The business saw nearly 40 percent quarter-over-quarter growth in the first quarter and now has an annual revenue run of over $20 billion with triple-digit growth rates year-over-year.
“If our chips business was a standalone business that sold chips produced this year to AWS and other third parties as other leading chip companies do, our annual revenue run rate would be $50 billion,” he said. “As best as we can tell, our custom silicon business is now one of the top three data center chip businesses in the world. The speed at which we’ve gotten here is extraordinary, and we have momentum for our custom AI silicon.”
AWS already has very large, multi-year, multi-gigawatt Trainium commitments from Anthropic and OpenAI, as well as an increasing number of companies like Uber betting on Trainium, Jassy said.
“We now have over $225 billion in revenue commitments for Trainium,” he said. “Our Trainium2 chip has about 30 percent better price performance than comparable GPUs. It is largely sold out. Trainium3, which just started shipping at the start of 2026 and has 30 [percent] to 40 percent more price performance than Trainium2, is nearly fully subscribed. And much of Trainium4, which is still about 18 months from broad availability, has already been reserved.”
Jassy said AWS recently announced that Meta is committed to using tens of millions of its AWS Graviton CPU chips to run the CPU intensive workloads behind agentic AI with the performance and efficiency needed at their scale.
“AI is commonly seen as a GPU story, but the rise of agentic workloads—real-time reasoning, code generation, reinforcement learning, and multi-step task orchestration—is driving massive CPU demand as well,” he said. “As AI systems shift from answering questions to taking actions, and as post-training and inference scale up, the compute required pulls heavily on CPUs. That’s why Meta chose Graviton, which delivers up to 40 percent better price performance than any other x86 processors and is now used by 98 percent of the top 1,000 EC2 customers.”
Jassy said Amazon continues to be confident in the long-term CapEx investments it is making.
“Of the AWS CapEx we intend to spend in 2026, much of which will be installed in future years,” he said. “We have high confidence this will be monetized well, as we already have customer commitments for a substantial portion of it, and that it will yield compelling operating margins and ROIC (return on invested capital). As we’ve been sharing, the faster AWS grows, the more short-term CapEx we’ll spend. AWS has to lay out cash for land, power, buildings, chips, servers, and networking gear in advance of when we can monetize it, typically six to 24 months before we start billing customers, depending on the component. However, these CapEx investments fund assets with many-year useful lives: 30-plus years for data centers, five to six years for chips, servers, and networking gear.”
During the question-and-answer segment of the conference call, when asked about the kind of investment AWS will need to make going forward for its chip business, Jassy said it would be a “significant” expense.
“We do view this as truly a once-in-a-lifetime opportunity where every application that we know is going to be reinvented, and there are so many new applications that none of us have ever imagined or dreamed we could build that are starting to be built and will be built,” he said. “And all that is going to be built on top of AI with a lot of consumption of CPUs and core as well. So I expect that we will invest a significant amount of capital over the coming years to pursue that opportunity.”
When asked by another analyst about AWS’ backlog, Jassy said the backlog for the first quarter is $364 billion, not including the recent deal AWS announced with Anthropic for over $100 billion.
Amazon By The Numbers
For its first fiscal quarter 2026, which ended March 31, Amazon reported total revenue of $181.5 billion, up 15 percent over the $155.7 billion the company reported for its first fiscal quarter 2025.
That included North America revenue of $104.1 billion, up 12 percent; international revenue of $$39.8 billion, up 19 percent; and AWS revenue of $37.6 billion, up 28 percent.
The company also reported GAAP net income of $30.3 billion or $2.78 per share, up significantly from last year’s $17.1 billion or $1.59 per share.
Looking ahead, Amazon expects second fiscal quarter revenue of between $194 billion and $199.0 billion, up year-over-year by 16 percent and 19 percent.
