Amazon CEO Andy Jassy revealed in his annual shareholder letter released on Thursday that Amazon is considering breaking away from its previous model of only offering its own chips, and instead selling its self-developed chips directly to third-party customers. It was disclosed that the chip division's annualized revenue has exceeded $20 billion, and if the business officially opens to external sales, the scale of this business is expected to surge to $50 billion.

Business Model Shift from "Rental" to "Sales"

For a long time, Amazon's chip strategy has been completely different from that of NVIDIA or Intel. Previously, Amazon did not sell physical hardware, but instead "rented" the computing power of chips like Trainium and Inferentia through its cloud service AWS. In his letter, Jassy clearly stated that due to extremely strong market demand, Amazon may soon sell entire rack-mounted chips directly to external third parties.

Production Surge Driven by the Demand for Computing Power

Currently, Amazon's self-developed chips are in short supply:

  • Trainium 2: As the second-generation AI training chip, its cost-performance ratio has improved by about 30% compared to similar GPUs, and it is already sold out.

  • Trainium 3: Scheduled to start shipping at the beginning of 2026, its performance will increase by another 30% to 40%, and its current subscription rate is nearly full.

  • Trainium 4: Although it is still about 18 months away from official launch, a significant portion of its production capacity has already been booked.

Alternative Solutions to Counter NVIDIA's Monopoly

With the explosive growth of global AI model training demand for computing power, companies are urgently seeking alternatives to NVIDIA. Jassy pointed out that AWS' current production capacity bottleneck is preventing some demand from being met. To address this, the company plans to double its total power capacity by the end of 2027. He emphasized that AI is a once-in-a-lifetime opportunity, and Amazon will not take a conservative approach to this wave of technological change.

This strategic transformation means that Amazon is moving from a single cloud service provider to a more aggressive hardware supplier, directly entering the core market of AI infrastructure dominated by NVIDIA.