Amazon Web Services is making a move that could reshape the balance of power in the artificial intelligence chip market. According to authoritative sources, the cloud giant is in talks to sell its custom AI chips, known as Trainium, to other companies for use in data centers. This strategy directly challenges Nvidia, the long-time leader in AI chips.
Amazon's AI chief, Peter DeSantis, told Bloomberg that AWS is negotiating with potential buyers, though he declined to name specific companies. The discussions are still in early stages, but the idea of selling proprietary chips stems from a shareholder letter last April, where CEO Andy Jassy expressed interest in exploring this possibility. Jassy stated that if the chips were sold to third parties like other manufacturers do, Amazon's chip business could generate an annual run rate of around $50 billion.
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While this figure would not topple Nvidia's current annual revenue of approximately $326 billion, it would be comparable to Intel's yearly earnings. Amazon's move marks a significant shift: until now, AWS resisted direct chip sales, preferring to use them internally for its cloud services. The Trainium chips, designed specifically for AI model training and inference, have been so successful that the current capacity and the next-generation Trainium4 (still under development) have already sold out.
Selling chips to third parties could lead to long waiting lists for existing customers unless Amazon can boost production through its manufacturing partners, such as TSMC. However, TSMC is already Nvidia's primary supplier and recently surpassed Apple as its largest customer, making it difficult for Amazon to secure additional capacity. Despite this, AWS spokesperson Doron Aronson confirmed that the company is seriously considering this option.
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This move by Amazon comes amid increasing competition in the AI chip sector. Nvidia, under CEO Jensen Huang, recently announced entry into a new $200 billion market with CPUs for AI, challenging Intel and AMD directly. Amazon, on its part, aims to carve out a slice of the AI data center chip market, potentially worth $50 billion.
Amazon is no stranger to exploring new AI frontiers. In Shenzhen, China, operating humanoid robots through body control has become a coveted job, and Amazon's AI ecosystem may integrate with such innovations. Additionally, with the arrival of iOS 27, users can already test new AI features on their iPhones, indicating that competition extends to the consumer side.
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For further reading, see: In Shenzhen Operating Humanoid Robots with Your Body Is a Coveted Job. For a comparison with the main competitor, check the Wikipedia page on Nvidia.
Implications for the AI Chip Market
Amazon's decision to sell its own chips could accelerate the adoption of customized AI solutions, reducing dependence on a single supplier. While Nvidia remains the undisputed leader, the entry of a player like Amazon offers attractive alternatives for companies seeking high performance and competitive costs. With the support of the vast AWS ecosystem, Trainium chips could become a popular choice for medium and large data centers.
