Amazon Weighs Direct Sales of AI Chips in Challenge to Nvidia’s Dominance
AWS says Trainium capacity has sold out and the chips business could reach a $50 billion annual run rate, Jassy said.
- AWS AI chief Peter DeSantis confirmed the company is in talks to sell its custom Trainium AI chips to third parties, marking a potential shift in Amazon's cloud strategy.
- In his April shareholder letter, Amazon CEO Andy Jassy signaled interest in selling chips, estimating they could generate a $50 billion annual run rate if sold as a standalone business.
- Historically, AWS has resisted selling chips to protect cloud service revenue bundled with storage and networking. Meeting new demand would require manufacturing partners like TSMC to produce surplus capacity.
- This move positions Amazon to compete directly with Nvidia, which currently holds a $326 billion revenue run rate. Customers seeking alternatives to Nvidia's dominant processors have fueled demand for custom AI hardware.
- AWS spokesperson Doron Aronson confirmed selling racks of chips to third parties is now possible, though talks remain early-stage as the company plans for future hardware like Trainium4.
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Amazon's shares rose on Thursday (18) after the company confirmed to be in negotiations to sell artificial intelligence chips and enter a growing market still dominated by Nvidia. Exclusive material for subscribers. To have full access, access the link of the material and register.
Amazon weighs direct sales of AI chips in challenge to Nvidia’s dominance
Amazon is exploring a major expansion of its artificial intelligence chip business by considering direct sales of its custom AI processors to outside companies, Bloomberg reports. The initiative centers on Trainium, a family of chips designed to provide a lower-cost alternative to Nvidia’s dominant graphics processors for training and running AI models. Until now, Amazon has primarily used these chips within its cloud computing platform, where …
Amazon.com Inc. is in discussions to sell its custom-made AI chips for use in other companies’ data centers, in a key expansion of its efforts to erode Nvidia Corp.’s domain. Peter DeSantis, director of Amazon’s AI, pointed out that the world’s largest cloud computing company has already started negotiations, although it declined to reveal the name of potential customers. “We see AI infrastructure as a rapidly evolving sector,” he said in an int…
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