Amazon’s AI business hits $25 billion run rate, outpacing early AWS

Amazon’s AI business has crossed a $25 billion annualized revenue run rate. It got there in roughly three years. CEO Andy Jassy told investors on the July 30 earnings call that the unit is growing “several hundred times faster” than AWS did in its early days. The numbers behind the milestone In its Q2 2026 report, Amazon disclosed that its AWS AI business and its custom chip business each passed the $25 billion run-rate mark. Both posted triple-digit year-over-year growth. A quick translation for anyone allergic to finance terms: a run rate takes current revenue and projects it across a full year. It is a snapshot of momentum, not a booked annual total. The broader cloud unit also had a strong quarter. AWS revenue reached $42.2 billion, up 37% from a year earlier. That works out to a $169 billion annualized run rate. It also marks AWS’s fastest growth rate in the last 18 quarters. AWS posted an operating margin of 39.4%, alongside substantial growth in operating income. Amazon reported a backlog of $496 billion, which also grew at a triple-digit rate year over year. Demand is exceeding its capacity for 2026 and 2027. The $220 billion question Amazon raised its 2026 capital expendit...