AI NewsWaveAmazon to Sell Its Own Trainium AI Chip Externally, Taking On Nvidia
Key points
- Amazon to sell Trainium chips directly to outside customers
- CEO Jassy cites strong demand, supplying beyond AWS
- After earnings, after-hours shares fall about 7%
According to Chosun Biz, Amazon has decided to sell its own artificial intelligence chip, Trainium, directly to outside customers. On a third-quarter earnings conference call on the 29th (local time), Amazon CEO Andy Jassy said, in effect, that demand for Trainium is very strong and that the company will make the chip usable outside Amazon Web Services (AWS) as well.
Interpretations of the strategy differed somewhat by outlet. EBN reported that Amazon aims to grow a chip it developed to reduce its dependence on Nvidia into a separate revenue source and enter the AI chip market. Digital Daily reported that Amazon will sell the chip externally while continuing to use it in the cloud, dividing its supply between short-term revenue and long-term cash flow.
Earnings fell short of market expectations. According to iNews24, Amazon's third-quarter revenue of $201.94 billion and earnings per share (EPS) of $1.89 both fell below market forecasts, and its shares dropped more than 7% in after-hours trading. Newsis reported that its fourth-quarter revenue outlook was also below market expectations. AWS, on the other hand, posted 39% revenue growth, its highest growth rate in about five years (Newsis, Digital Daily). AI Newspaper (인공지능신문) reported that Jassy projected AWS revenue growth would exceed 40% in 2027 and 2028 as well.
Investment pressure stood out. According to e-Focus (이포커스), AWS sold $46 billion worth of services from July to September, up 39% from a year earlier, but over the past year Amazon as a whole spent $42.4 billion more on capital expenditures than the cash it brought in from operations. Bloter reported that AWS operating profit rose 55%, but capital spending exceeded cash earned from operations. Digital Today, citing Business Insider, reported that Amazon said it will raise 2027 capital expenditures significantly above this year's.
Market reaction continued. Chosun Biz reported that after Alphabet plunged on the 29th, Amazon and Intel also fell sharply after the market closed, and IT Chosun reported that Intel shares plunged 28% following Alphabet, signaling renewed anxiety about AI investment.
Glossary Trainium is Amazon's own AI chip. Capital expenditure (CAPEX) is the money a company spends on long-term assets such as data centers and equipment.