# AWS AI Fuels Amazon's Q2 Surge _AWS revenue surged 36.7% in Q2, with Andy Jassy crediting AI and core services for the acceleration. The cloud giant's AI business now exceeds $25B._ **Published:** 2026-07-31 **Source:** https://www.startuphub.ai/ai-news/technology/2026/aws-ai-fuels-amazon-s-q2-surge --- Amazon's cloud division, AWS, experienced a significant revenue acceleration in the second quarter, with growth hitting 36.7% year-over-year. This marks the fastest growth rate in 18 quarters, fueled by a symbiotic relationship between artificial intelligence services and foundational cloud infrastructure. Amazon CEO Andy Jassy noted that AWS is now a $169 billion annualized revenue run rate business, a scale that would place it 24th on the Fortune 500 if it stood alone. According to [Amazon News](https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-aws-revenue-growth-q2-2026-earnings?utm_source=rss), the company's custom chips business also surpassed a $25 billion annualized revenue run rate, growing at triple-digit percentages. AI Inference PreferredDriver From the article 2 mentionsJassy attributed AWS's appeal to its broad capabilities, its position as the preferred location for AI inference due to proximity to data and applications, and its robust security and operational performance.Custom Chips GrowthCoreFrom the articleAccording to Amazon News, the company's custom chips business also surpassed a $25 billion annualized revenue run rate, growing at triple-digit percentages.Fueled by AICoreAI business now exceeds $25 billion annualized revenue run rateFrom the articleThis marks the fastest growth rate in 18 quarters, fueled by a symbiotic relationship between artificial intelligence services and foundational cloud infrastructure.fuelsAI Boosts CoreEffectAI growth increases demand for core services, especially CPUs post-trainingFrom the article 2 mentionsThe need to store vast AI datasets and run vector databases also plays to AWS's strengths, with the company claiming a significant lead in these core infrastructure areas.strengthensCore ServicesCorefoundational cloud infrastructure also driving significant demand and growthFrom the article 6 mentionsHe detailed how AI growth bolsters core services, particularly through the increased demand for CPUs in post-training, reinforcement learning, and agent tool use.drivesAWS Q2 SurgeOutcomerevenue grew 36.7% year-over-year, fastest growth in 18 quartersFrom the article 8 mentionsAmazon's cloud division, AWS, experienced a significant revenue acceleration in the second quarter, with growth hitting 36.7% year-over-year.results inAWS ScaleOutcomeFrom the article 8 mentionsAmazon CEO Andy Jassy noted that AWS is now a $169 billion annualized revenue run rate business, a scale that would place it 24th on the Fortune 500 if it stood alone. ## AI and Core Services Drive Growth Jassy attributed AWS's appeal to its broad capabilities, its position as the preferred location for AI inference due to proximity to data and applications, and its robust security and operational performance. He detailed how AI growth bolsters core services, particularly through the increased demand for CPUs in post-training, reinforcement learning, and agent tool use. AWS's Graviton chips, offering superior price-performance, are a key advantage here. The need to store vast AI datasets and run vector databases also plays to AWS's strengths, with the company claiming a significant lead in these core infrastructure areas. The company is seeing strong adoption across its AI stack. Jassy reiterated Amazon's stance that technically competent companies will build their own specialized foundation models, not necessarily frontier models. Amazon's [SageMaker](https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-aws-revenue-growth-q2-2026-earnings?utm_source=rss) service simplifies this process, while [Amazon Bedrock](https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-aws-revenue-growth-q2-2026-earnings?utm_source=rss) provides a high-performance, cost-effective inference service with leading models and essential governance. Bedrock is also expanding rapidly. ## Agentic Services Take Center Stage Building and deploying AI agents remains a complex challenge for many enterprises. Jassy highlighted [Bedrock AgentCore](https://www.aboutamazon.com/news/company-news/amazon-ceo-andy-jassy-aws-revenue-growth-q2-2026-earnings?utm_source=rss), which offers managed infrastructure components like policies, payments, and web search to simplify agent development and deployment. Features like Strands are further accelerating the creation of these agents. Beyond custom agent development, turnkey solutions are gaining traction. Coding agents, such as Amazon's Kiro, are proving cost-effective and seeing increased usage. Amazon Quick, an AI work companion, is also gaining momentum, managing digital workloads across various applications and SaaS tools with enterprise-grade security controls. In Q2, Quick introduced autonomous agents and expanded its integrations, with major companies like 3M and BMW already adopting it. AWS also offers agentic services like Amazon Connect for call centers and AWS Transform for software migration. A new offering, AWS Continuum, addresses the growing concern of AI-assisted security vulnerability discovery. Continuum ingests existing vulnerability backlogs and uses frontier models to scan, prioritize, validate, and remediate code flaws using agents and business context, aiming to reduce false positives and recommend fixes. The rapid expansion of AWS AI services, particularly in areas like agent development and security, positions Amazon as a key player for enterprises navigating the complexities of generative AI adoption. This focus on both foundational infrastructure and specialized AI tools is a critical differentiator. --- Original analysis from [startuphub.ai](https://www.startuphub.ai), the #1 AI startup directory.