\n<\/p>\n
Amazon (AMZN) CEO Andy Jassy released his annual shareholder newsletter on Thursday, outlining the company\u2019s approach to AI and indicating that Amazon is thinking about selling its own AI processors to third parties, increasing competition with Nvidia (NVDA) and AMD (AMD).<\/p>\n
According to Jassy, AWS\u2019s AI revenue has a run-rate of more than $15 billion as of Q1 2026 and continues to grow. What\u2019s more, he said the business could be growing faster, but despite adding 3.9 gigawatts of capacity in 2025 and plans to double that by 2027, the company is still capacity-constrained.<\/p>\n
The CEO also took a shot at Nvidia, saying that while Amazon continues to use that company\u2019s chips, customers want better \u201cprice-performance.\u201d That, Jassy said, is why Amazon\u2019s custom AI GPU Trainium2 chip is sold out, while is Trainium3 is \u201cnearly fully-subscribed\u201d despite the fact that it started shipping at the start of 2026.<\/p>\n
And its Trainium4, which is still more than a year away from broad availability, is also selling well.<\/p>\n
According to the chief executive, Amazon\u2019s chip business has an annual revenue run rate of $20 billion and is growing at triple-digit year-over-year rates. But Jassy says that amount is understated because it only monetizes its chips through its AWS EC2 service.<\/p>\n
If it were a standalone business, he said, Amazon\u2019s chip revenue would have a run rate of roughly $50 billion.<\/p>\n
\u201cThere\u2019s so much demand for our chips that it\u2019s quite possible we\u2019ll sell racks of them to third parties in the future.\u201d<\/p>\n<\/div>\n