Amazon Eyes AI Chip Sales as It Moves to Challenge Nvidia’s Dominance
News Desk
20 June 2026, 17:32
Amazon Web Services is exploring plans to sell its in-house AI chips to other companies. The move could position the cloud giant as a more direct competitor to NVIDIA in the rapidly growing artificial intelligence hardware market.
Speaking to Bloomberg, AWS Senior Vice President Peter DeSantis said the company is in discussions about making its Trainium AI chips available for use in third-party data centers. He did not disclose which companies may be interested in purchasing the chips.
The discussions remain at an early stage. However, the idea aligns with comments made by Amazon CEO Andy Jassy in his annual shareholder letter earlier this year.
Jassy noted that demand for Amazon’s custom AI chips has grown so rapidly that the company is considering selling them beyond AWS. He estimated that if the chip business operated as a standalone unit and sold hardware to AWS and external customers, it could generate annual revenue of around $50 billion.
AWS currently uses Trainium chips primarily within its cloud platform. The company earns revenue not only from AI processing but also from related services such as storage, networking, security and monitoring.
That model has given AWS little incentive to sell the chips directly. Instead, customers access the hardware through Amazon's cloud infrastructure.
Another challenge is supply. According to Jassy, available Trainium capacity has been selling out quickly. He also said capacity for the next-generation Trainium4 chips has largely been reserved despite the product being more than a year away from launch.
Selling chips externally could therefore increase pressure on supply unless Amazon significantly expands production through manufacturing partners such as TSMC.
Competition for manufacturing capacity remains intense. TSMC's largest customers include Nvidia and other major technology firms racing to build AI infrastructure. AWS spokesperson Doron Aronson also confirmed that the company is considering future direct sales of its AI hardware.
The potential expansion comes as Nvidia continues to dominate the AI chip industry. Nvidia recently outlined ambitions to grow beyond graphics processors and expand into AI-focused CPUs, putting it in more direct competition with traditional chipmakers such as Intel and AMD.
If Amazon proceeds with external Trainium sales, it could create one of the strongest alternatives yet to Nvidia's AI hardware ecosystem. While a potential $50 billion business would remain far smaller than Nvidia's current revenue scale, it would still represent a major new force in the global AI chip market.
