Amazon is in early talks to sell its Trainium AI chips to third-party data centers, AWS AI chief Peter DeSantis told Bloomberg. CEO Andy Jassy has pegged the chip business opportunity at roughly $50 billion annually — a direct challenge to Nvidia's $326 billion revenue run rate.
Key facts
- AWS AI chief Peter DeSantis confirmed Trainium sale talks to Bloomberg.
- Andy Jassy estimated chip business at $50B annual run rate.
- Nvidia's current revenue run rate is $326B.
- Current Trainium and next-gen Trainium4 capacity are sold out.
- Nvidia recently became TSMC's largest customer, surpassing Apple.
AWS is exploring selling its custom Trainium AI chips to other companies for use in data centers, according to a Bloomberg interview with Amazon AI chief Peter DeSantis. According to TechCrunch, the talks are in early stages and AWS declined to name potential buyers. The move stems from CEO Andy Jassy's April shareholder letter, where he wrote: "If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion."
The $50B vs. $326B math
A $50 billion chip business would make Amazon a significant player — roughly the size of Intel's annual revenue — but it would not dethrone Nvidia, which is currently on a $326 billion revenue run rate. The challenge is less about raw revenue and more about breaking Nvidia's near-monopoly on AI training silicon, where the H100 and Blackwell families dominate.
The capacity dilemma
AWS has historically resisted selling chips directly because it profits more from the full cloud stack — compute, storage, networking, monitoring — that runs on its silicon. Jassy noted in the same letter that current Trainium capacity sold out "almost instantly," as did capacity for the upcoming Trainium4, which is over a year from availability. Selling chips externally would force AWS to either prioritize outside buyers over its own cloud customers or secure additional wafer allocation from TSMC — a fab where Nvidia recently became the largest customer, surpassing Apple.
The competitive context
The announcement comes as Nvidia CEO Jensen Huang declared a new $200 billion market selling CPUs for AI, directly entering Intel and AMD territory. Amazon's move is symmetrical: it is pushing into Nvidia's core silicon business while Nvidia pushes into Amazon's core infrastructure business. AWS spokesperson Doron Aronson confirmed the company may sell chips, saying, "While we've historically declined requests to sell chips directly, Andy noted it's quite possible we'll sell racks of them to third parties in the future."
What to watch
Watch for any formal Trainium sale announcement at AWS re:Invent in December 2026, and whether Amazon can negotiate additional TSMC wafer capacity without disrupting its own cloud supply. Also monitor Nvidia's response — potential pricing pressure on Blackwell or accelerated Vera Rubin timelines.
Source: techcrunch.com
