Amazon May Sell Trainium AI Chips To Third Parties In Shot At Nvidia

Amazon CEO Andy Jassy says the company may eventually sell its Trainium AI chips directly to outside customers, not just through AWS, which would put Amazon in more direct competition with Nvidia. "There's so much demand for our chips that it's quite possible we'll sell racks of them to third parties in the future," Jassy wrote in his annual shareholder letter Thursday. He also revealed the company's chip business is already running at more than $20 billion annually, with demand so strong that current and even future generations are largely spoken for. Quartz reports: Access to Amazon's chips is currently limited to Amazon Web Services, with customers paying for cloud-based usage rather than owning any physical hardware. Selling to AWS and external customers alike, as standalone chipmakers do, would put annual revenue at around $50 billion, up from the $20 billion the company estimates for the year, Jassy said. The $20 billion figure spans three product lines: Trainium, the AI accelerator chip; Graviton, a general-purpose processor; and Nitro, a chip that helps run Amazon's EC2 server instances. All three are growing at triple-digit rates year over year, Jassy claimed in his letter.

Jassy said demand for Trainium has outpaced supply at each generation. Trainium2 is essentially unavailable, with its entire allocated capacity spoken for. Trainium3 started reaching customers in early 2026, and reservations have filled nearly all available supply. Even Trainium4 -- which is not expected to reach wide release for another year and a half -- has substantial pre-orders committed. Jassy argued that a full-scale Trainium rollout could shave tens of billions off annual capital costs while meaningfully widening profit margin.

"Trainium2 is essentially unavailable"

[Anonymous Coward]

So it's unobtainium. Got it.

If Amazon runs out of stock

[Powercntrl]

Will they become Trainium Unobtainium?

Re:

[Fly Swatter]

Don't worry there will be plenty for sale on Amazon Marketplace. Obviously with no warranty.

I May Sell My Stinky Socks

[SlashbotAgent]

I may sell my stinky socks for all you perverts out there. But, that doesn't mean that it will happen. Nor does it mean that, if I do put them up for sale, anyone will buy them.

Marketing genius

[arglebargle_xiv]

Sort of like fruit and veg growers of geographically constrained fruit/vegetable types who say "let's stop just selling our lucrative only-grows-here fruit to others and start selling the seeds as well, that'll bring us much more profit!".

Re:

[sabbede]

Well, yeah, it would, right? The seeds would be pure profit with no future risk because they can't grow elsewhere. You wouldn't be creating commercial competition. At most, there would be some people who get the plant to grow indoors and produce a little bit, probably not enough.

Columbia can sell all the fertilized coffee beans they want; it's not like I can grow a field in my back yard and cut Don Francisco out of the loop. Any place that can grow coffee probably already is.

Re:

[arglebargle_xiv]

I didn't mean they refuse to grow anywhere else, I meant they've been confined to a particular geographic area until now because no-one else had them. Think rubber trees, the Scottish guy who stole Chinese tea plants, and more recently kiwifruit in New Zealand, because who would have thought selling the plants/seeds to places closer to their markets than New Zealand, in other words everywhere on the planet, would curtail sales from New Zealand?

Hmm...

[coofercat]

Saying your pipeline for chips is full, when all you have is an internal market is pretty easy. You go around asking how many people would like, then produce that many, and poof! Your pipeline is 100% full.

Having a full pipeline with external customers is harder - you can't ask them all before you start and those you do ask may change their order quantities before you start production. You don't want to under-produce because you want to meet the demand, but you don't want unsold inventory either. As a result, you either have to keep people waiting, or else you have to take a hit on over-production. Either results in a pipeline which is not 100% full.

That aside, anyone selling "AI chips" that isn't nvidia strikes me as a good thing. There's a slim chance that if a few start doing this, the price of ordinary computing might come down to a sensible level again.

That market does need more players.

[sabbede]

I don't like how Nvidia is basically the sole provider of AI chips. It means they're putting all their resources into producing things that aren't consumer GPUs, and damnit I want a new one! With more AI chip suppliers, there will be less demand on Nvidia, which will free them up to get back to their core business - gaming. And if they weren't so damn busy serving not-the-customers-who-built-their-brand, maybe the prices would come back down a bit.