Amazon CEO Andy Jassy released his highly anticipated annual shareholder letter on Thursday, offering investors a sweeping look at the company's artificial intelligence ambitions, its custom silicon roadmap, and a bold vision for the future of robotics and logistics. Amazon shares rose more than 5% in midday trading on the disclosures, making it one of the standout performers among the Magnificent Seven on an otherwise subdued Thursday session.
On the critical question of AI revenue, Jassy revealed that AWS's artificial intelligence business is running at a rate of more than $15 billion annually as of the first quarter of 2026 and continues to grow at a rapid pace. He acknowledged, however, that AWS could be growing even faster — despite adding 3.9 gigawatts of data center capacity in 2025 and plans to double that figure by 2027, the company remains capacity-constrained, underscoring the insatiable global demand for AI compute.
A significant portion of the letter addressed Amazon's competitive strategy in the semiconductor space. Jassy took a pointed shot at NVIDIA, stating that while Amazon continues to work with the chip giant, customers are increasingly demanding better price-performance. He drew a direct parallel to Amazon's earlier success with its Graviton CPU chip, which achieved up to 40% better price-performance than competing x86 processors and is now used by 98% of the top 1,000 EC2 customers. Jassy said the company's second-generation custom AI chip, Trainium2, offers approximately 30% better price-performance than comparable GPUs and has largely sold out. Trainium3, which began shipping at the start of 2026 and improves upon Trainium2 by another 30% to 40%, is already nearly fully subscribed. Amazon's chip business now runs at a $20 billion annual revenue rate and is growing at triple-digit year-over-year rates.
Jassy also outlined Amazon's satellite broadband initiative, Amazon Leo, which is officially scheduled to launch commercially in mid-2026. The letter noted meaningful revenue commitments already secured, including a deal with Delta Air Lines — the world's highest-grossing airline — to provide Wi-Fi for 500 planes beginning in 2028. Other early customers include JetBlue, AT&T, Vodafone, DIRECTV Latin America, and NASA.
On the logistics front, Jassy highlighted the company's Same Day Fulfillment Centers, with more than 85 locations built across the U.S. that have already delivered over 500 million same-day units in 2026. The letter also provided an update on Prime Air drone delivery, which now has a scalable design and plans to serve communities with 30 million customers by year-end, targeting half a billion drone deliveries by the end of the decade.
Investors and analysts will now watch closely for whether Amazon's custom silicon ambitions intensify competitive pressure on NVIDIA, particularly as the AI inference market continues its rapid expansion. The letter reinforces Amazon's strategy of deepening vertical integration across the AI stack, from custom chips and data centers to end-user AI services — a model that, if successful, could significantly reduce AWS's dependence on third-party chip suppliers over the next several years.