Amazon Weighs Spinout of Chip Design Business and AWS

A recent thought experiment suggests that Amazon could unlock significant value by spinning out Annapurna Labs, its chip design business, and AWS, its cloud computing subsidiary. This could be done through partial spinouts, with Amazon retaining majority stakes in both companies.

The idea is not as far-fetched as it seems, given the success of AWS and Annapurna Labs in recent years. The Graviton CPU has been used by over 130,000 customers at the end of Q2 2026, up 45% year on year. The custom silicon business has an annualized run rate of more than $25 billion and is experiencing triple-digit growth.

Andy Jassy, CEO of AWS, stated that if AWS sold its homegrown chips to the outside world instead of renting them as EC2 capacity, it would have an annualized run rate of around $50 billion. This implies that the theoretical external revenue for AWS silicon would be on the order of $60 billion.