Amazon CEO: Chip Business Worth $50 Billion, Trainium Generation Four Fully Subscribed

According to monitoring by Beating, Amazon CEO Andy Jassy spent a significant portion of the Q1 earnings call discussing self-developed chips. He stated that if the chip business were to be spun off and operated independently, similar to other chip companies, the annual revenue would reach $50 billion. According to him, Amazon’s self-developed chip business has entered the top three in global data center chips, noting that ‘achieving this speed is extraordinary.’ The supply and demand situation for the fourth generation of Trainium (Amazon’s self-developed AI training chip) is as follows: Trainium2 is sold out; Trainium3, which just began shipping earlier this year, offers 30% to 40% better cost-performance compared to Trainium2 and is nearly fully subscribed; Trainium4, which will not be widely available for about 18 months, has already been over half reserved. Jassy mentioned that Trainium has accumulated over $225 billion in revenue commitments from multi-billion watt training contracts with companies like Anthropic and OpenAI, as well as enterprise clients such as Uber. Jassy calculated that large-scale use of Trainium for inference could save hundreds of billions in CapEx annually compared to relying on external chips, with operational margin advantages reaching several hundred basis points. Most of the inference for Amazon Bedrock (AWS’s model inference service, used by over 125,000 customers, including nearly 80% of Fortune 100 companies) is running on Trainium. When asked if they would sell Trainium racks directly, Jassy said they need to balance between meeting existing customer demands and external sales, but ‘I expect we will likely start selling in the coming years.’ AWS has a backlog of $364 billion in orders, not including the over $100 billion deal announced by Anthropic last week.