Amazon Web Services is now exploring selling its homemade AI chips directly to other companies. 

And if it works, it could be one of the biggest shake-ups in the AI chip world we’ve seen in years.

Amazon’s AI chief, Peter DeSantis, recently told Bloomberg that AWS is in early talks to sell its Trainium chips to outside companies for use in their own data centers. 

He didn’t name any potential buyers, however. This idea didn’t come out of nowhere. It traces back to Amazon CEO Andy Jassy’s annual shareholder letter from April 2026. 

In it, Jassy wrote that if Amazon’s chip business were its own company, selling chips to AWS and other third parties, it would already be running at about $50 billion a year. 

Nvidia

Right now, Nvidia sits at the top of the AI chip mountain. The company is on a $326 billion annual revenue run rate.

But a $50 billion competitor isn’t nothing. That’s roughly the size of Intel’s entire annual revenue, and Intel used to be the king of chips.

So while Amazon wouldn’t knock Nvidia off its throne overnight, it would give companies a real alternative. 

Gold Mine

AWS has actually been holding back from selling these chips externally, and for good reason.

When a company uses Trainium chips on AWS, Amazon doesn’t just collect money for the chips themselves. 

It also charges for storage, security, networking, and monitoring. It’s a whole ecosystem of services that flow from a single chip sale.

Selling chips to outside data centers would cut Amazon out of all that extra revenue. So the math gets complicated fast.

Demand 

There’s another wrinkle here. Jassy said in that same April letter that Trainium chip capacity sold out almost immediately after launch. 

The next version, Trainium4, won’t even be available for more than a year. Yet its capacity is already spoken for. 

So if Amazon starts selling to outside companies, it risks leaving its own cloud customers on waiting lists.

To ramp up supply, Amazon would need more help from its manufacturing partners, particularly TSMC, the world’s most powerful chip foundry. 

But Nvidia recently overtook Apple to become TSMC’s biggest customer. Getting more capacity from TSMC means competing with Nvidia for factory time. 

Also read: Nvidia to Increase Chip Production to Meet China’s Demand

Thinking Big

CEO Jensen Huang recently announced that Nvidia has found a brand-new $200 billion market, this time in CPUs for AI, not just the GPUs it’s famous for. 

That puts Nvidia in direct competition with Intel and AMD. So we’re seeing a fascinating chess match play out. 

Nvidia is expanding into CPU territory. Amazon wants to sell its own AI chips. Everyone is going after everyone else’s lunch.