Amazon Eyes Trainium Chip Sales to External Data Centers, Targets $50B Revenue
AMZN•Amazon is negotiating to sell its custom Trainium AI chips to third-party data centers, expanding availability beyond AWS and contributing to a 1.8% intraday stock rise to $241.82. Demand for Trainium’s third iteration has outstripped supply, while Amazon projects chip revenues could grow from $20 billion to $50 billion annually.
1. Talks to Sell Trainium Chips Externally
Amazon is in discussions to offer its custom Trainium AI processors to external data centers, a shift from its previous AWS-only availability. No potential buyers have been named as the company seeks to broaden its AI infrastructure market.
2. Stock Reaction and Supply Constraints
The announcement propelled Amazon shares up as much as 1.8%, topping at $241.82 intraday. Third-generation Trainium demand has exceeded production capacity, and a fourth-generation model is slated for release next year.
3. Revenue Outlook and Competitive Dynamics
Selling Trainium outside AWS could boost annual chip revenues from about $20 billion to $50 billion. Amazon frames Trainium as a peer to Nvidia GPUs and follows in the footsteps of peers opening proprietary chip access.
