Amazon Might Start Selling Its Own AI Chips – and That Changes the Game

With input from Business Insider, the Register, Market Watch.

Amazon has spent years renting out computing power. Now it’s eyeing something bigger: selling the hardware itself.

CEO Andy Jassy said the company could begin offering full racks of its Trainium AI chips to outside customers within the next couple of years. That’s a notable shift. Until now, those chips have lived inside Amazon’s cloud, accessible only through Amazon Web Services.

If that plan moves forward, Amazon won’t just be a cloud giant anymore. It’ll be a chip vendor too – stepping more directly into the territory dominated by Nvidia.

That creates an awkward dynamic. Amazon still depends heavily on Nvidia’s GPUs to power its cloud. At the same time, it’s building a rival product and thinking about selling it.

The demand is already there. Jassy said Trainium has racked up a massive $225 billion in revenue commitments through AWS deals with companies like OpenAI, Anthropic, and Uber. And even that supply isn’t keeping up – current chip generations are largely spoken for, with future versions getting reserved well before launch.

Amazon isn’t being subtle about its ambitions. Jassy says the company’s custom silicon business – which includes Trainium chips and Graviton processors – is already among the top three data center chip operations in the world. If it were spun out and sold chips broadly, he estimates it could be running at around $50 billion in annual revenue.

That kind of scale doesn’t happen by accident. Amazon is pouring money into AI at a staggering rate, planning roughly $200 billion in capital spending this year alone. Partnerships are stacking up too. A recent deal with OpenAI involves a $50 billion investment tied to using Trainium chips, while Anthropic has committed to buying tens of billions’ worth of computing power over time.

Inside AWS, the growth is just as intense. The cloud unit pulled in $37.6 billion this quarter, its fastest growth in over a year. Tools like Bedrock – Amazon’s platform for running AI models – are seeing usage explode, with customer spending jumping sharply and new models rolling out at a rapid pace.

Still, anyone hoping to buy Trainium chips off the shelf anytime soon will have to wait. Amazon’s priority is meeting internal demand and existing contracts first. Supply is tight, and the company knows it.

But the direction is clear. Amazon isn’t content with renting access to AI infrastructure. It wants to build it, control it, and eventually sell it – turning one of its biggest internal advantages into a standalone business.