Amazon hopes to challenge Nvidia more directly by selling its AI chips

If Amazon Web Services has its way, the cloud giant is going to push even deeper into Nvidia’s market, in what might be one of the biggest challenges to Nvidia’s AI chip dominance we’ve seen so far. Amazon’s AI chief Peter DeSantis told Bloomberg that AWS is in talks to sell its AI chip Trainium to other companies for use in data centers. DeSantis declined to specify which companies could be the buyers of such chips. Such talks about selling chips are in the early stages, the company tells TechCrunch, and stem from Amazon CEO Andy Jassy’s annual shareholder letter in early April, in which he said the company’s homegrown AI chips were so coveted that he was thinking about selling them. “If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.” How much of a challenge to Nvidia could Amazon be? A $50 billion competitor wouldn’t exactly tank Nvidia — which is currently on a $326 billion revenue run rate — if it keeps delivering quarters like the last one . But it’s akin to Intel’s annual revenues . AWS has so far resisted selling its AI chips for a lot of reasons. The biggest is that the money AWS actually makes on its chips is a waterfall effect. …