AWS plans to sell Trainium chips, challenging Nvidia
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- AWS is in talks to sell its Trainium AI chips to other companies for data center use, per AWS AI chief Peter DeSantis in comments to Bloomberg.
- Andy Jassy wrote in his April shareholder letter that AWS's chip business could reach a ~$50 billion annual run rate if sold to third parties as standalone chip companies do.
- Jassy also disclosed that current Trainium capacity sold out almost instantly, and Trainium4 capacity — unavailable for over a year — sold out in advance.
- Nvidia is on a $326 billion revenue run rate; a potential $50 billion AWS chip business would be comparable to Intel's annual revenue but a fraction of Nvidia's scale.
- Scaling external sales would leave current AWS customers on waiting lists unless TSMC — now the foundry's largest customer after supplanting Apple — can produce a surplus alongside Nvidia's orders.
- Nvidia CEO Jensen Huang separately declared a new $200 billion CPU market for AI, expanding Nvidia beyond GPUs into Intel and AMD territory.
Why it matters: A $50 billion Amazon chip business would still be a fraction of Nvidia's $326 billion run rate, but the bigger obstacle is supply: Nvidia has supplanted Apple as TSMC's largest customer, making it harder for Amazon to secure the foundry capacity needed to serve both its own backlog and outside buyers.
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