Amazon CEO Jassy says company could sell AI chips, raising stakes for Nvidia, AMD

Amazon CEO Andy Jassy said in his annual shareholder letter that Amazon may sell its custom AI processors to third parties, heightening competition with chip makers like Nvidia and AMD. He highlighted AWS AI revenue running at over $15 billion as of Q1 2026 and said Amazon’s chip business has a $20 billion annual run rate (potentially ~$50 billion if standalone). Demand for Trainium chips is strong (Trainium sold out; Trainium3 nearly fully subscribed), and Amazon expects Trainium to save “tens of billions” in capex annually and deliver several hundred basis points of operating-margin advantage. Jassy also noted capacity constraints (3.9 GW added in 2025; plans to double by 2027) and reiterated heavy investment plans including $200 billion in capex for 2026. The shifts could pressure incumbents (NVDA/AMD) while improving AWS economics and long-term profitability for Amazon, with broader implications for cloud infrastructure and chip markets.