The move could transform AWS from a cloud provider into a more direct player in the AI semiconductor market.
Amazon Web Services (AWS) is considering selling its in-house Trainium artificial intelligence chips to external customers, a move that could position the cloud giant more directly against Nvidia in the rapidly growing AI semiconductor market.
AWS AI chief Peter DeSantis told Bloomberg that the company has been discussing the possibility of supplying Trainium chips for use in third-party data centers, though he did not disclose potential customers. Amazon later indicated that such plans remain at an early stage.
The idea builds on comments made by Amazon CEO Andy Jassy in his annual shareholder letter earlier this year, where he highlighted the strong demand for the company’s custom AI chips. Jassy suggested that if AWS’ chip business operated independently and sold products both internally and externally, it could generate annual revenue at a run rate of approximately $50 billion.
Despite growing interest, AWS has historically focused on using Trainium chips within its cloud infrastructure rather than selling them directly. The company benefits not only from AI computing services but also from associated offerings such as storage, networking, security, and monitoring tools that customers use alongside AI workloads.
Another challenge is supply. Amazon has repeatedly stated that demand for Trainium processors exceeds available capacity. According to Jassy, current-generation Trainium chips sold out rapidly, while capacity for the next-generation Trainium4 processor has already been largely reserved despite its launch being more than a year away.
Any large-scale chip sales would likely require AWS to significantly expand production through manufacturing partners such as Taiwan Semiconductor Manufacturing Co. (TSMC), which is already heavily committed to serving major customers including Nvidia.
The potential move signals Amazon’s growing ambitions in the AI hardware market. While Nvidia is broadening its reach into AI-focused CPUs, AWS appears to be exploring opportunities to extend its presence beyond cloud services and into the broader semiconductor ecosystem.
