Amazon says it could begin selling its Trainium AI chips to external customers within two years, putting the cloud giant in closer competition with Nvidia.
During Wednesday's earnings call, CEO Andy Jassy said "there's a good chance" the company will start offering full racks of Trainium chips beyond its own cloud "over the next couple of years." That provides a clearer timeline for earlier comments in his April shareholder letter, where he only said expansion could happen "in the future."
An Amazon spokesperson confirmed to Business Insider that this is the first time the company has provided a specific timeframe.
Today, Trainium is only accessible as a cloud service through Amazon Web Services. The company rents access to this AI computing power over the internet.
Selling physical racks of Trainium chips would be a radical business model shift, essentially turning Amazon into a chip company. It would also put Amazon in more direct competition with Nvidia. That's a potentially awkward situation, because Amazon still relies heavily on Nvidia supplying GPUs for its cloud service.
"We have such demand from various companies who will consume as much as we make that we have to decide how much we're going to allocate," Jassy said during the call.
Jassy added that Trainium has racked up $225 billion in "revenue commitments" through its cloud service from companies including OpenAI, Anthropic, and Uber, though he didn't specify contract durations. More broadly, Jassy said Amazon is now "one of the top three data center chip businesses in the world," citing its growing portfolio across Trainium AI chips and Graviton CPUs.
"We're really unusually well-positioned for the inflection that we're seeing," Jassy said.
Amazon stock rose almost 3% in after-hours trading, putting it on course for a record on Thursday. The company's quarterly results topped Wall Street expectations, though spending on data center expansion remains high.
Amazon is in the midst of an aggressive AI investment cycle that is expected to cost about $200 billion this year, underscoring how central this new technology has become to the company's strategy.
In February, Amazon struck a new partnership with OpenAI, committing to invest $50 billion in the AI lab. In return, OpenAI agreed to use Amazon's Trainium chips and co-develop customized models and a new AI agent service that will run through Amazon's cloud platform.
At the same time, Amazon deepened its successful relationship with Anthropic. In April, the cloud giant said it would invest up to $25 billion more in the startup, adding to the $8 billion it had already committed. Anthropic has committed to purchasing $100 billion worth of Trainium chips.
In his annual shareholder letter, Jassy said Amazon's chip business is on track to generate more than $20 billion in revenue this year, adding that the figure could approach $50 billion if the unit operated as a standalone business selling to external providers.
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