Amazon is eyeing Nvidia’s turf, and it wants to turn its in-house silicon into a proper product.
Amazon CEO Andy Jassy has started talking about selling the company’s Trainium AI chips directly to external buyers, putting a number on the chip operation for the first time. He says the business is already running at more than $20 billion a year.
Writing in the company shareholder letter, Jassy said: “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.”
Right now, outsiders only get their paws on Trainium through Amazon Web Services, paying for cloud usage rather than buying hardware. Jassy claims that if Amazon sold to AWS and external customers in the same way standalone chipmakers do, the annual revenue line could hit about $50 billion.
The $20 billion run rate covers three lines: Trainium for AI acceleration, Graviton as a general-purpose processor and Nitro to help run EC2 server instances. Jassy says all three are growing at triple-digit rates year on year, which is a big claim in a year when everyone is counting pennies.
He says Trainium demand has beaten supply at every generation. Trainium2 is basically unobtainable because its entire allocated capacity is already spoken for.
Trainium3 started reaching customers in early 2026, and Jassy says reservations have swallowed nearly all available supply. Trainium4 is not expected to reach wide release for another year and a half, yet he says it already has substantial pre-orders.
Jassy is pitching this as a way to spend less on the kit that keeps AWS humming. He argues a full-scale Trainium rollout could shave tens of billions off annual capital costs while widening margins, which is the sort of sentence that makes finance folk grin.
He is defending Amazon’s plan to spend roughly $200 billion on capital expenditure in 2026, with most of it aimed at AWS data centres.
AI-related property and equipment purchases surged $50.7 billion year on year, pushing free cash flow down to $11 billion in 2025 from $38 billion. That is a lot of cash turned into concrete, copper and blinking lights.
Jassy says AWS’s AI business is running at more than $15 billion in annualised revenue as of the first quarter of 2026, up from essentially nothing three years ago. He puts the overall AWS revenue run rate at $142 billion in the fourth quarter of 2025, representing 24 per cent year-on-year growth.
Across the industry, the supply of AI-grade chips has not kept up with demand, forcing buyers to look beyond Nvidia’s usual kit. That crunch is giving Amazon room to pitch its own processors as something more than internal plumbing.
Jassy added: “Virtually all AI thus far has been done on Nvidia chips, but a new shift has started.”
