Amazon CEO Andy Jassy just published his annual shareholder letter, and it’s basically a corporate chess move disguised as a friendly update. TechCrunch AI reports that Jassy took careful aim at Nvidia, Intel, SpaceX’s Starlink, and several other competitors, all while maintaining the polite veneer of partnership language.
The biggest target? Nvidia.
Jassy acknowledged the partnership but dropped a line that should get Jensen Huang’s attention: “Virtually all AI thus far has been done on NVIDIA chips, but a new shift has started.” He’s talking about Amazon’s homegrown Trainium AI chips. According to the letter, demand for Trainium3 has nearly sold out existing capacity. Even more striking, Trainium4 is 18 months from availability and is also nearly sold out.
The $20 Billion Chip Business You Didn’t See Coming
Here’s the number that matters: Amazon’s custom chip business has hit a $20 billion annual revenue run rate. Jassy goes further, claiming that if Amazon sold chips externally like Nvidia does, it’d be a $50 billion ARR business.
For context, Nvidia pulled in $215.9 billion in actual revenue last year. So Amazon isn’t dethroning anyone tomorrow. But a $20B internal chip operation growing this fast signals that the hyperscalers are serious about reducing their Nvidia dependency.
Intel didn’t escape either. Jassy pointed out that AWS’s Graviton CPU now runs across 98% of the top 1,000 EC2 customers. Two companies reportedly asked to buy all of Amazon’s Graviton capacity for 2026. Amazon had to say no because other customers need it too. That’s a flex.
Satellites, Robots, and Drones
Jassy also talked up Amazon Leo, the company’s Starlink competitor launching mid-2026. It’s already secured contracts with Delta Airlines, AT&T, Vodafone, Australia’s National Broadband Network, and NASA.
Then there’s the robotics angle. With over 1 million warehouse robots generating data, Jassy hinted Amazon could start selling “robotics solutions” for industrial and consumer use. An Amazon humanoid robot? He’s not ruling it out.
The Real Message: Justify the $200 Billion
What this letter is really about is defending Amazon’s massive capital expenditure. The company plans to spend $200 billion in 2026, mostly on AWS data centers. That’s more than any other major tech company.
With Amazon’s stock stuck below $200 a share, shareholders want answers. Jassy’s response: “We’re not investing approximately $200 billion in capex in 2026 on a hunch.” He pointed to the OpenAI deal, where the AI company committed to spending $100 billion on AWS. He also referenced “several other customer agreements completed (and unannounced), or deep in process.”
Why This Matters
This letter reveals Amazon’s strategy for the next era of cloud computing:
- Vertical integration over vendor dependence. Custom chips (Trainium, Graviton) reduce reliance on Nvidia and Intel while offering customers better price-performance.
- Infrastructure as moat. By outspending everyone on data centers, Amazon bets it can lock in the largest AI workloads before competitors catch up.
- Diversification beyond cloud. Satellite internet, robotics, and drone delivery aren’t side projects. They’re future revenue streams.
Jassy acknowledged the “bubble” debate directly: “I’ve followed the public debate on whether this technology is over-hyped, whether we’re in ‘a bubble.'” His answer? Not for Amazon.
Whether that confidence holds up depends on whether those unannounced customer agreements materialize and whether Trainium chips can actually compete on performance, not just price. The shareholder letter is a statement of intent. Now Amazon has to deliver.
Full details are available in the original report from TechCrunch AI.