Amazon Web Services is in early talks to sell its proprietary Trainium AI chips to external companies for use in their own data centers, marking a significant potential escalation in the rivalry between AWS and Nvidia. The move was confirmed by Amazon’s AI chief Peter DeSantis, who declined to name prospective buyers, and by AWS spokesperson Doron Aronson, who acknowledged the company had historically declined such requests but was now reconsidering.
The shift stems from Amazon CEO Andy Jassy’s April shareholder letter, in which he revealed that if the company’s chip business operated as a standalone entity selling to AWS and third parties, it would generate an annual run rate of approximately $50 billion. Jassy also noted that capacity for the current Trainium chip had sold out almost immediately, as had capacity for the next generation, Trainium4, which remains more than a year from availability.
AWS has historically kept Trainium exclusive because its chips generate a compounding revenue effect on the cloud platform, with customers paying not only for AI compute but for associated storage, security, networking, and monitoring services. Selling chips externally would complicate that model and likely require manufacturing capacity that TSMC, currently dominated by Nvidia as its largest customer, may struggle to supply.
The development comes as Nvidia CEO Jensen Huang has separately identified a new $200 billion market opportunity in AI-focused CPUs, encroaching on Intel and AMD territory. Jassy’s chip ambitions represent a reciprocal pressure, with the two companies increasingly moving into each other’s core markets as AI infrastructure spending accelerates.
