Amazon’s Chip Unit Hits $20B Run Rate as Rival eBay Faces $56B Takeover Bid
AMZN•GameStop launched a $55.5 billion all-stock-and-cash bid at $125 per eBay share, aiming to turn the online marketplace into a rival to Amazon. Separately, Amazon’s custom silicon unit reached a $20 billion annual revenue run rate with 40% sequential growth and next-generation chips nearly fully subscribed.
1. GameStop’s $56B Takeover Proposal
GameStop offered to buy all common shares of eBay for about $55.5 billion at $125 per share in a 50/50 cash-and-stock mix, representing a 46% premium since its initial stake purchase. The bid is backed by a $20 billion debt commitment from TD Bank and leverages $9.4 billion in GameStop cash reserves, with planned $2 billion in annualized cost reductions to boost eBay EPS.
2. Amazon’s Custom Silicon Surge
Amazon’s custom silicon business reached a $20 billion annual revenue run rate in Q1, marking 40% sequential growth as major AI customers like Anthropic and OpenAI nearly filled next-generation chip capacity. CEO Andy Jassy indicated the unit could generate $50 billion annually if operated as a standalone business, underscoring its strategic value for AWS profitability.
3. Competitive and Valuation Implications
A combined GameStop-eBay entity could present a new direct competitor to Amazon’s marketplace, potentially pressuring Amazon’s domestic e-commerce leadership. Meanwhile, Amazon’s expanding chip division diversifies revenue streams and enhances AWS margins, factors that could support a higher valuation for the company.
