Amazon CEO: Chip business valued at $50 billions operates independently, Trainium Gen4 fully booked

According to Beating monitoring, Amazon CEO Andy Jassy devoted a large portion of the Q1 earnings call to discussing in-house developed chips. He stated that if the chip business were spun out to operate independently and sell chips externally like other chip companies, annualized revenue would reach $50 billion. According to him, Amazon’s self-developed chip business is now among the top three data center chip players globally, calling the growth rate “extraordinary.”

The supply and demand situation for the fourth-generation Trainium (Amazon’s in-house AI training chip): Trainium2 has sold out; Trainium3 only began shipping earlier this year, offers another 30% to 40% better cost-performance ratio over Trainium2, and is nearly fully booked; Trainium4 is about 18 months away from mass availability, and most of its supply is already reserved. Jassy noted that Trainium has amassed over $225 billion in revenue commitments, including multi-year, multi-gigawatt training contracts from Anthropic, OpenAI, and enterprise customers such as Uber.

Jassy ran some numbers: by using Trainium at scale for inference, annual capex can be reduced by tens of billions of dollars compared to relying on external chips, with operational profit margin improvement reaching several hundred basis points. Amazon Bedrock (AWS’s model inference service, used by over 125,000 customers and nearly 80% of Fortune 100 companies) already runs most inference on Trainium.

When asked whether Trainium racks would be sold directly, Jassy said Amazon needs to balance current customer demand and external sales, but “I expect we are very likely to start selling them over the next few years.” AWS currently has an order backlog of $364 billion, not yet including the over $100 billion mega-deal Anthropic announced last week.