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Amazon hopes to challenge Nvidia more directly by selling its AI chips
TechCrunch • • business
Key Points:
- Amazon Web Services (AWS) is considering selling its AI chip Trainium to other companies for data center use, potentially challenging Nvidia's dominance in the AI chip market.
- AWS CEO Andy Jassy indicated in an April shareholder letter that the demand for AWS's homegrown AI chips is so high that selling them to third parties could generate an annual run rate of around $50 billion.
- Despite this potential, AWS has been cautious about selling chips externally due to limited production capacity and the broader revenue generated from associated cloud services like storage and security.
- Current Trainium chip capacity has sold out quickly, including the upcoming Trainium4, complicating the ability to supply third-party buyers without impacting existing customers.
- AWS would need to significantly increase manufacturing output, likely through partners like TSMC, to compete with Nvidia, which remains dominant with a $326 billion revenue run rate.
