AWS Weighs Selling Trainium Chips to Outside Data Centers
Amazon may start selling its custom Trainium AI chips to external data centers. Amazon AI chief Peter DeSantis confirmed the company is in active talks. The move would push AWS from chip consumer to chip vendor.
Demand Is Already Ahead of Supply
Current Trainium capacity sells out almost immediately after becoming available. Trainium4, which is not yet shipping, has already sold out. Pre-selling a chip more than a year before availability is a reasonable demand signal. It also means AWS is not pitching an untested product to external buyers.
The Number Jassy Put On It
CEO Andy Jassy said a standalone AWS chip business serving both internal and external customers would run at approximately $50 billion annually. Nvidia's current annual revenue run rate is $326 billion. The comparison is imperfect since the product mix and market differ, but the gap is real. AWS entering chip sales would be significant. It would not be a Nvidia-scale business, at least not immediately.
TSMC Sits in the Middle
AWS manufactures Trainium through TSMC, which recently overtook Apple as its largest customer. More external Trainium demand flows directly to TSMC volume. The manufacturing relationship is already in place.
Nvidia Is Moving the Other Direction
CEO Jensen Huang this week declared a new $200 billion market opportunity in CPUs for AI, targeting Intel and AMD territory directly. The same week, AWS announced it added OpenAI to the models served on its cloud platform.
Both developments fit the same pattern: cloud providers and chip companies are expanding into each other's territory at the same time.
What This Could Mean
One possibility is that external chip sales stay a secondary revenue line, mostly serving customers already on AWS who want Trainium in their own facilities. A second possibility is that Amazon is testing whether it can build a real chip business using existing manufacturing relationships and brand reach as a foundation. The Trainium4 pre-sell-out makes the second scenario less speculative than it sounds.
Neither the CPU push from Nvidia nor the Trainium talks are confirmed business lines yet. The directional pressure is clear though: the wall between hardware vendors and cloud providers is getting thinner.
Source: Techcrunch