Amazon AWS Reports 37% Growth Amid Claims of Misleading AI Metrics
Strong Q2 2026 results are clouded by allegations that Amazon inflated chip revenue and used accounting gains to bolster margins.
Amazon reported robust financial results for the second quarter of 2026, headlined by a 37% year-over-year revenue increase for Amazon Web Services (AWS). While the figures suggest a powerful acceleration in cloud demand, the company faces sharp criticism over the transparency of its AI and hardware reporting.
AWS reported a Q2 operating margin of 39.4%, though this figure was bolstered by approximately $600 million in mark-to-market gains from energy derivative contracts. Additionally, Amazon reported that both its AI and chips businesses have reached run rates exceeding $25 billion. To support this trajectory, CEO Andy Jassy increased the company's capital expenditure forecast for the year to $220 billion, while the AWS order backlog has climbed to $496 billion. The company also booked $53.4 billion in gains from its stake in Anthropic this quarter.
Scrutiny of AI Claims
Despite the growth, cloud expert Corey Quinn, writing for The Register, has accused Amazon of using deceptive language to frame its success. Quinn argues that the reported "chips business" revenue is misleading, as it represents fully-loaded infrastructure rentals (EC2 instances) rather than the actual sale of physical silicon. Quinn likened this reporting method to "a hotel comparing its revenue to a mattress company's," suggesting Amazon is conflating service rentals with hardware sales to compete with the narrative of Nvidia.
Further discrepancies involve product availability and growth metrics. Amazon claimed its coding agent, Kiro, was "available" on iOS, but Quinn notes it was actually restricted to a limited group of users via Apple's TestFlight, stating, "Kiro is 'available' in the same way as I am available to play in the NBA." Additionally, claims that Bedrock spending in Q2 exceeded all prior quarters combined were flagged as misleading, as the company compared a single 90-day window against the previous 10 quarters of availability.
Industry Implications
These critiques suggest that Amazon may be "shading the truth" to justify an unprecedented $220 billion investment program. By utilizing accounting gains to inflate margins and blurring the line between infrastructure rental and chip sales, the company risks masking the actual rate of enterprise AI adoption. This creates a potential gap between the narrative of broad success and a reality where growth is concentrated among a few massive AI labs.
What to Watch
Investors and analysts will likely look for more granular breakdowns of AWS hardware revenue in future filings to determine if the $25 billion run rate is sustainable without the inclusion of rental services. Whether Amazon adjusts its reporting language or provides more transparency regarding the Kiro rollout will indicate if the company is responding to the pressure for more accurate AI performance metrics.