Amazon Plans Chip Unit Targeting $50 Billion in Third-Party Sales
Analysts predict Amazon will spin off its custom Graviton and Trainium chips into a third-party business, leveraging a current $20 billion internal AWS run rate to target $50 billion in external sales. The launch timing hinges on production capacity expansions beyond AWS demand.
1. Business Spin-Off Prediction
Analysts foresee Amazon leveraging custom Graviton and Trainium designs to create a standalone chip business offering processors to third-party clients. This strategic shift could diversify AWS revenue streams and pit Amazon directly against established semiconductor firms.
2. Revenue Projections and Capacity
Internal AWS use of these chips runs at about $20 billion annual revenue, with external sales projected to reach $50 billion if production scales sufficiently. Amazon plans to expand fabrication capacity before launch to ensure it can meet both internal and third-party demand.