Amazon Web Services is considering selling its homegrown AI chips to other companies, a move that would push it directly into territory Nvidia has dominated for years. Amazon’s AI chief Peter DeSantis told Bloomberg that AWS is in talks with outside companies about buying its Trainium chips for use in their own data centers. He did not say which companies are involved.
According to TechCrunch, these talks are still early and trace back to Amazon CEO Andy Jassy’s annual shareholder letter from April. In that letter, Jassy floated the idea that Trainium chips were so in demand that selling them to outside buyers might actually make sense.
Jassy put a number on it in that letter: “If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.”
That figure matters. Nvidia is currently running at around $326 billion in annual revenue, so a $50 billion Amazon chips business would not topple it. But $50 billion is roughly what Intel brings in each year. That is not a rounding error. That is a serious competitor entering the market.
This is a significant shift for AWS, which has historically kept Trainium chips inside its own cloud. The reason for that is straightforward: Amazon makes far more money from the services wrapped around its chips than from the chips themselves. When a company runs AI workloads on AWS, Amazon charges for the computing, but also for storage, networking, security, and monitoring. Selling chips to a third-party data center means Amazon only captures part of that value chain.
There is also a supply problem. Jassy said in the same April letter that current Trainium capacity sold out almost immediately after becoming available. He also said capacity for Trainium4, which is not available for more than a year, had already been spoken for. Selling chips to outside buyers while existing AWS customers are on waiting lists is a difficult position to justify.
Getting more chips made is not simple either. Amazon works with TSMC to manufacture Trainium. TSMC recently surpassed Apple to become its own largest customer, largely because of Nvidia’s massive orders. Getting a bigger share of TSMC’s production line would mean competing with Nvidia for capacity at the foundry level, which is its own challenge.
AWS spokesperson Doron Aronson confirmed the direction of travel. “While we’ve historically declined requests to sell chips directly, Andy noted it’s quite possible we’ll sell racks of them to third parties in the future.”
The timing is notable. Nvidia CEO Jensen Huang recently said Nvidia is building a new $200 billion market by selling CPUs for AI workloads, moving into ground Intel and AMD have traditionally held. Meanwhile, Jassy appears to be making a move in the opposite direction, pushing Amazon’s chip ambitions out of its own cloud and into the broader market Nvidia built. Both companies are expanding into each other’s space at the same time.
For anyone buying AI infrastructure, this matters. More competition at the chip level means more choice, potentially better pricing, and less reliance on a single supplier. Nvidia’s grip on AI hardware has been near-total for several years. Amazon entering the third-party chip market, even gradually, changes that picture.
