Amazon's $50 Billion AI Chip Business: A Significant Threat to Nvidia?

The Motley Fool analyzes Amazon’s growing AI-chip effort and its potential to threaten Nvidia (NVDA.OQ). Amazon CEO Andy Jassy said Amazon’s internal chip business has an annual run rate of about $50 billion, and Amazon’s projected $200 billion capex in 2026 could reduce Nvidia’s sales if Amazon shifts more workloads onto its Trainium chips or sells racks to third parties. However, independent MLPerf benchmarks still favor Nvidia’s performance, Nvidia’s CUDA ecosystem remains a durable advantage, and Nvidia plans to launch the Vera Rubin platform later this year—supporting the view that Nvidia can retain pricing power and share. The article concludes that while Amazon is a credible long-term competitor, Nvidia’s lead and ecosystem make the stock a buy for medium-term investors.