Aiming at Nvidia! Report: Amazon in talks to sell its self-developed AI chips to other companies

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Amazon is planning to offer its self-developed artificial intelligence chip, Trainium, to external data center markets, marking a significant move by the world’s largest cloud computing company to challenge Nvidia’s market dominance.

Peter DeSantis, Amazon’s AI chief, confirmed in an interview in Paris on Thursday that the company has begun related negotiations, but declined to disclose the names of potential clients. Following the news, Amazon’s stock price rose 2.56% intraday to $243.58.

This move echoes Alphabet’s strategic path. In April this year, Google’s parent company CEO Sundar Pichai announced that its self-developed Tensor Processing Unit (TPU) chips would be offered to “specific customer groups” for deployment in their own data centers.

Demand signals are also clear: the third-generation Trainium chip began shipping earlier this year and is now “basically sold out”; the fourth-generation product is expected to launch next year and has already attracted strong pre-order interest. In April, Amazon disclosed that the Trainium series has generated over $225 billion in total revenue commitments.

Strategic Shift Was Long in the Making; External Sales Roll Out Accordingly

Trainium was launched in 2020, initially accessible only through Amazon Web Services (AWS), attracting major clients such as OpenAI, Anthropic PBC, and Uber Technologies Inc.

In April this year, Amazon CEO Andy Jassy hinted at this move in his shareholder letter, stating the company is “very likely” to sell full server racks with these chips to third parties—a part of Amazon’s broader strategy to comprehensively restructure its business around AI. The general view is that, in the AI race, Amazon has lagged behind some competitors.

Peter DeSantis said: “We see AI infrastructure as a rapidly evolving field and continuously look for ways to reach more clients.”

Rising Demand for Sovereign Computing; European Market Provides New Footholds

Another driver behind selling Trainium externally comes from the growing demand for locally controlled computing resources outside the U.S. Peter DeSantis noted that Europe is particularly prominent, with some voices calling for countries to reduce or even give up reliance on American technology.

He said at the VivaTech tech summit in France that so far, this trend has not had any impact on AWS’s business.

The AI boom has significantly boosted cloud computing revenues, while also spawning specialist AI cloud service providers and driving up demand for “sovereign cloud” services in places like Europe—such services are governed by local laws and typically require data storage and computing power to be deployed within the country’s borders.

Doubts on Cannibalizing AWS Business; Management Directly Refutes

Regarding market concerns about whether selling Trainium externally will divert business from AWS’s existing cloud services, Peter DeSantis directly refuted them. “There’s an enormous gap between AI consumption and demand,” he said. “I’m not worried about this issue.”

Meanwhile, Amazon’s general-purpose processor Graviton chip is also expanding. The company recently started supplying Graviton chips to Meta Platforms Inc.

Peter DeSantis noted that over the past three years, the number of Graviton chips newly added to Amazon’s computing systems exceeded that of any other chip type.

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