Amazon CEO Jassy says company could sell AI chips, raising stakes for Nvidia, AMD

Amazon (AMZN) CEO Andy Jassy released his yearly shareholder newsletter connected Thursday, outlining the company’s attack to AI and indicating that Amazon is reasoning astir selling its ain AI processors to 3rd parties, expanding contention with Nvidia (NVDA) and AMD (AMD).

Jassy said helium doesn’t judge the exertion is either overhyped oregon a bubble, but alternatively that margins and returns connected superior invested volition beryllium “appealing.” His convictions, helium said, stem from however rapidly AI is being adopted and the accelerated summation successful gross for Amazon’s AWS unit.

According to Jassy, AWS’s AI gross has a tally complaint of much than $15 cardinal arsenic of Q1 2026 and continues to grow. What’s more, helium said the concern could beryllium increasing faster, but the institution is inactive capacity-constrained, contempt adding 3.9 gigawatts of capableness successful 2025 and its plans to treble that by 2027.

Jassy said 2 ample AWS customers person asked whether they tin bargain each of its customized CPU Graviton capableness successful 2026. However, the institution can’t hold to the determination due to the fact that it inactive needs to supply CPU capableness to its different customers.

The CEO besides took a changeable astatine Nvidia, saying that portion Amazon continues to usage that company’s chips, customers privation amended “price-performance.” That, Jassy said, is wherefore Amazon’s customized AI GPU Trainium2 spot is sold out, portion its Trainium3 is “nearly fully-subscribed” contempt the information that it started shipping astatine the commencement of 2026.

“Having our ain hotly demanded AI spot opens up galore possibilities, but possibly nary larger than the quality to little costs for customers and unafraid amended economics for AWS,” Jassy said. “At scale, we expect Trainium volition prevention america tens of billions of capex dollars per year, and supply respective 100 ground points of operating borderline vantage versus relying connected others’ chips for inference.”

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According to the main executive, Amazon’s spot concern has an yearly gross tally complaint of $20 cardinal and is increasing astatine triple-digit percentages twelvemonth implicit year. But Jassy said that magnitude is understated due to the fact that it lone monetizes its chips done its AWS EC2 service.

If it were a standalone business, helium said, Amazon’s spot gross would person a tally complaint of astir $50 billion.

“There’s truthful overmuch request for our chips that it’s rather imaginable we’ll merchantability racks of them to 3rd parties successful the future,” Jassy said.

None of Amazon’s AI enactment comes cheap, though. In February, the institution revealed plans to walk $200 cardinal connected superior expenditures successful 2026 unsocial arsenic portion of its build-out. Amazon banal is disconnected 7% since the announcement.