Amazon (AMZN) to Combine Trainium and Cerebras Chips to Speed Up AI Applications

E-commerce giant Amazon AMZN -1.23% ▼ plans to combine chips from startup Cerebras Systems with its own Trainium processors to improve how AI software runs in the cloud. Unsurprisingly, the new system will be offered through Amazon Web Services (AWS), the world’s largest cloud computing provider, beginning in the second half of 2026. Although the financial terms of the partnership were not disclosed, the goal is to provide companies with faster, more efficient tools for running AI applications. According to AWS vice president Nafea Bshara, Amazon intends to deploy as many of the chips as customers demand.

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Interestingly, the system is designed so that each type of chip performs a different step in the process of running AI models, which is known as inference computing. First, Amazon’s Trainium 3 processors will handle the “prefill” stage, which means interpreting and understanding a user’s prompt. After that, Cerebras’ Wafer Scale Engine chips will take over and generate the actual response from the AI model. Normally, splitting tasks between different chips can slow things down because data has to move back and forth between them.

However, the companies say their specialized hardware is designed to minimize that delay, which could make AI responses faster. At the same time, the partnership is an important step for Cerebras as the company prepares for a potential initial public offering. In fact, having AWS as a customer increases the startup’s visibility in the AI infrastructure market. Importantly, Cerebras is known for designing extremely large processors that can handle huge amounts of data at once, and is hoping to challenge industry leader Nvidia NVDA -1.16% ▼ .

Is Amazon a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 40 Buys and three Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $279.88 per share implies 34.5% upside potential.

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