Amazon to Buy 1 Million Nvidia GPUs While Expanding Custom Chips

Amazon CEO Andy Jassy announced that Amazon Web Services (AWS) will take delivery of 1 million Nvidia GPUs and associated networking equipment by the end of 2027. The deal is expected to generate tens of billions of dollars in revenue for Nvidia, reinforcing a partnership Jassy described as deep and durable during the company's first-quarter 2026 earnings call.

Despite the large purchase, Jassy revealed that Amazon is now deploying more of its own custom AI accelerator chips, specifically Trainium, than Nvidia chips. This strategic shift toward custom hardware aims to save Amazon tens of billions of dollars in capital expenditures. AWS currently reports a $225 billion backlog for Trainium compute, contributing to a total AWS backlog of $364 billion. Amazon's proprietary chips, including Trainium, Graviton, and Nitro, target budget-friendly options for smaller developers, while Nvidia hardware remains the primary choice for sophisticated generative AI applications.

This movement toward custom silicon is mirrored by other major cloud providers who are developing internal chips to reduce costs and challenge Nvidia's market dominance. Amazon's continued support of Nvidia remains significant, however, as it supports high-profile first-quarter deals with the U.S. Army, Meta Platforms, and OpenAI.