Amazon Talks to Sell Trainium AI Chips to Third Parties

Amazon.com Inc. is in early discussions to sell its custom-designed Trainium artificial intelligence chips to third-party companies for use in their own data centers. This strategic shift expands the role of Amazon's custom silicon beyond internal use within Amazon Web Services, positioning the company as a direct hardware supplier to compete with Nvidia Corp.

AI chief Peter DeSantis confirmed the discussions during the VivaTech conference in France, noting that the third version of the Trainium chip is largely sold out and a fourth version is expected next year. The move addresses growing international demand for sovereign AI services, particularly in Europe, where local laws require data processing to remain within host countries. Amazon aims to leverage the price-performance of Trainium, with the Trainium2 offering 30% better performance than comparable GPUs.

This strategy follows a similar move by Alphabet Inc., which began delivering its tensor processing units to select customers in April. Amazon's internal chip business has scaled rapidly, reportedly reaching an annual run rate of $50 billion with triple-digit year-over-year growth.

Despite challenging Nvidia's market share, Amazon remains a significant customer of the chip maker. CEO Andy Jassy has emphasized the company's ongoing partnership with Nvidia, with reports indicating a deal for Nvidia to provide 1 million GPUs to AWS by the end of 2027.