Amazon Plans to Sell Custom AI Chips to Challenge Nvidia

Amazon.com, Inc. (NASDAQ:AMZN) plans to sell its custom AI chips for use in other companies' data centers, according to a Bloomberg report on June 18. This move represents a critical expansion of Amazon's efforts to cut into AI-giant Nvidia's (NASDAQ:NVDA) dominance.

The Product

Amazon has developed custom AI chips, known as Trainium and Inferentia, designed to train and run AI models with higher efficiency and lower cost compared to Nvidia's chips. The direct sale of these chips will allow other companies to access Amazon's technology without needing to use AWS cloud services.

Pricing and Availability

Amazon has not yet disclosed pricing details or a timeline for the direct availability of the chips. The company is expected to reveal more information in the coming months.

Competition

Nvidia currently dominates the AI chip market with a market share exceeding 80%, thanks to its H100 and A100 series chips. Amazon also faces competition from other companies such as Google (with its TPU chips) and Microsoft (which is developing its own chips in collaboration with AMD).

Potential Impact on the Company

This expansion could diversify Amazon's revenue away from cloud services and increase competition in the lucrative chip market. However, it remains unclear how successful Amazon will be in breaking into a market dominated by Nvidia.