Amazon has said it may start selling its Trainium AI chips to external customers within two years, exposing the cloud giant to tougher competition from Nvidia.
On Wednesday’s earnings call, CEO Andy Jassy said there is a “good chance” the company will start offering full racks of Trainium chips beyond its own cloud “within the next few years.” This makes the timeline clearer for his earlier comments in an April letter to shareholders, in which he only said expansion could occur “in the future.”
An Amazon spokesperson confirmed to Business Insider that this is the first time the company has given a specific deadline.
Currently, Trainium is only accessible as a cloud service through Amazon Web Services. The company rents access to this AI computing power over the internet.
Selling physical racks of Trainium chips would be a fundamental business model shift, essentially turning Amazon into a chip company. It also puts Amazon in more direct competition with Nvidia. This is a potentially troubling situation, as Amazon still relies heavily on Nvidia to supply GPUs to its cloud services.
“We have to decide how much money to allocate because there is demand from different companies and they consume as much as we produce,” Jassy said on a conference call.
Jassy added that Trainium has attracted $225 billion in “revenue commitments” through its cloud services from companies such as OpenAI, Anthropic and Uber, but did not specify the length of the agreement. More broadly, Jassy said Amazon is now “one of the top three data center chip businesses in the world,” citing a growing portfolio across its Trainium AI chips and Graviton CPUs.
“We’re really in an unusually good position for the changes that we’re seeing right now,” Jassy said.
Amazon’s stock rose about 3% in after-hours trading, putting it on track for a new record on Thursday. The company’s quarterly results beat Wall Street expectations, but spending on data center expansion remains high.
Amazon is in the midst of an aggressive AI investment cycle expected to cost around $200 billion this year, highlighting how central this new technology is to the company’s strategy.
In February, Amazon entered into a new partnership with OpenAI, pledging to invest $50 billion in its AI lab. In return, OpenAI agreed to use Amazon’s Trainium chips to co-develop customized models and new AI agent services that run through Amazon’s cloud platform.
At the same time, Amazon deepened its relationship with Anthropic. In April, the cloud giant announced it would invest up to an additional $25 billion in the startup, on top of the $8 billion it had already committed to. Anthropic has committed to purchasing $100 billion worth of Trainium chips.
In his annual shareholder letter, Jassy said Amazon’s chip business is on track to generate more than $20 billion in revenue this year, adding that number could approach $50 billion if the division operates as a standalone business selling to outside providers.
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