Amazon CEO Andy Jassy spent a significant chunk of his first-quarter earnings call talking about the company's homegrown chips. According to him, if the chip business were spun off and sold to the public like any other semiconductor company, it would be generating an annualized revenue of $50 billion. He says Amazon's in-house chip business is now among the top three in the data center market — "unprecedented" speed, in his words.
Let's talk about the supply situation for Trainium, Amazon's AI training chip lineup. The second generation, Trainium2, is already sold out. Trainium3, which started shipping early this year, offers 30 to 40 percent better price-performance than its predecessor — and is nearly fully booked. Trainium4, still about 18 months from mass production, is already largely pre-ordered. In total, Jassy says Trainium has accumulated over $225 billion in revenue commitments, with multi-year training contracts from Anthropic and OpenAI (each signing up for multiple gigawatts of compute) as well as enterprise customers like Uber. Anthropic, which recently secured a $10 billion investment from Google, is one of the biggest customers. The tight supply mirrors a broader GPU shortage that is driving up prices for AI startups.
Jassy also did the math on savings. Running inference at scale on Trainium, he said, saves hundreds of billions of dollars in annual capital expenditure compared to relying on external chips, translating into hundreds of basis points of operating margin improvement. Most of Amazon Bedrock — the AWS model inference service, which will soon host OpenAI models, as Jassy confirmed — already runs on Trainium. Bedrock now has over 125,000 customers, including nearly 80 percent of the Fortune 100.
When asked whether Amazon would sell Trainium racks directly to customers, Jassy said he's balancing internal demand with external sales, but "I expect we'll likely start selling them in the next few years." AWS's backlog of orders stands at $364 billion — and that doesn't even include the more than $100 billion deal Anthropic announced last week.