source: techcrunch ai: amazon hopes to challenge nvidia more directly by selling its ai chips
level: business
amazon web services is in early talks to sell its trainium ai chips to other companies for use in data centers, according to ai chief peter desantis. this move would mark a shift from aws's current model of only using the chips internally for cloud services. desantis did not name potential buyers, but the discussions follow ceo andy jassy's april shareholder letter, where he noted that if the chip business were standalone, it would have a $50 billion annual run rate.
aws has previously resisted selling chips directly, focusing instead on revenue from cloud services like storage and security that accompany chip usage. however, demand has outstripped supply, with current trainium capacity selling out quickly and future trainium4 capacity already booked. selling chips could strain supply further unless manufacturing expands, but aws spokesperson doron aronson confirmed the possibility, saying the company may sell racks to third parties in the future.
this potential entry into the chip market pits amazon more directly against nvidia, which has a $326 billion revenue run rate. while a $50 billion competitor would not topple nvidia, it would be comparable to intel's annual revenue. nvidia is also expanding into cpus, moving into intel and amd territory, while amazon's chip ambitions signal a broader competitive push in ai hardware.
why it matters: selling trainium chips could give ai developers more hardware options and reduce reliance on nvidia, potentially lowering costs and spurring innovation.
source: techcrunch ai: amazon hopes to challenge nvidia more directly by selling its ai chips