Amazon Plans To Sell Its AI Chips To Outside Customers Starting Late 2027
CEO Andy Jassy says chips revenue is growing triple digits and that selling externally means giving up some AWS returns.
Amazon plans to start selling its Trainium AI chips to customers outside Amazon Web Services late in 2027, CEO Andy Jassy said on the company's third-quarter earnings call on Thursday. He said the move trades faster revenue now against bigger returns from keeping the chips in AWS.
Customers keep asking
Jassy said the chips business is growing triple-digit percentages from a year earlier, and that revenue commitments for Graviton and Trainium have each risen more than 20 times. Customers using Amazon's custom silicon saved more than $2 billion in the third quarter alone, he said.
He said demand is strong enough that customers keep urging Amazon to offer the training chips beyond AWS. "We intend to do so late in 2027," Jassy said.
He also said Amazon open-sourced Torch Neuron, which lets developers run existing PyTorch code on Trainium without rewriting it.
Revenue now or returns later
An analyst from Goldman Sachs asked how Amazon will weigh external sales against its own compute needs. Jassy said few companies face the choice: those with a significant cloud business and a chip strong enough to sell externally number "effectively two."
Everyone, he said, makes advanced chips with the same provider, which can supply only so many each year, so each company must split its allocation. Selling externally lets a company book revenue as soon as chips leave inventory. Using them in EC2 instances or Bedrock, he said, drives more total revenue and free cash flow because the chips earn for five to six years.
Amazon will revisit the split "probably every year," Jassy said, and he called selling chips "a very different business" from cloud infrastructure. He said both paths will be significant and that chip price performance is a strategic advantage for Amazon's own costs and for a separate chip business.
Bedrock already runs on Trainium
Answering a Barclays analyst, Jassy said most of the workloads on Bedrock, Amazon's AI inference service, run on Trainium. He said that gives Amazon price performance and cost advantages it can pass to customers.
AWS, which provides computing, storage and AI services, reported revenue of $46 billion, up 39.3% from a year earlier, with operating income of $17.8 billion. Amazon expects 2026 cash capital spending of about $220 billion, mostly for AWS, and meaningfully more in 2027, Jassy said.
Jassy said Amazon will start selling chips externally in late 2027 and will reassess the balance with AWS every year.
Sources
- Amazon misses Wall Street targets, offers cautious Q4 outlook as shares slide | AP News — Associated Press
- Amazon (AMZN) Q3 earnings report 2026 — CNBC
- Breaking Down Amazon's Third-Quarter Earnings — Bloomberg
- AWS Q3 earnings report 2026 — CNBC
- Amazon Q3 Earnings: Ad Revenue Growth Slows — variety.com
