Andy Jassy is more bullish than ever on AI and Amazon's custom semiconductors, stating they won't be conservative in their approach.
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Amazon disclosed AI cloud revenue hit $15B annual run rate; Jassy addresses mega spending plans that have dragged on stock.
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CEO says they're not spending $200B in capex in 2026 on a hunch - momentum is real, has never seen technology more quickly adopted than AI.
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Amazon is in a 'land rush' for AI, causing cash crunch and negative free cash flow in high growth period where spending outpaces revenue.
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Jassy says they're willing to endure short-term headwinds for substantial medium to long-term surplus, referencing AWS playbook success.
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Several other customer agreements complete but not announced yet; deep in process with more deals.
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On the custom semiconductor effort to compete with Nvidia.
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Demand for Trainium chips is booming; business is on fire; changes economics for AWS and will be much larger portion than people think.
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Trainium will save Amazon tens of billions in capex per year and provide several hundred basis points of operating margin advantage versus relying on others' chips.