Amazon Explores Potential Chip Sales to External Entities

Amazon Considers Selling Chips to Other Companies as Demand Surges

Amazon.com Inc. is exploring the possibility of selling its in-house developed chips to other companies, according to Chief Executive Officer Andy Jassy. This move comes as the cloud-computing giant's silicon unit is on track to generate more than $20 billion in revenue over the course of a year.

The disclosure offers a rare insight into the scale of Amazon's in-house chip operation, which produces general-purpose computing and AI accelerators, as well as chips that enhance the efficiency of the company's servers. Currently, Amazon rents this hardware to customers of Amazon Web Services, its cloud-computing unit. However, the high demand for processors capable of building artificial intelligence models has strained supply and prompted companies to seek alternatives to Nvidia Corp.'s market-leading graphics processing units.

Amazon's chip business has the potential to reach a $50 billion annual run rate if it were an independent business selling semiconductors to AWS customers and other third parties. This figure highlights the significant scale of Amazon's in-house chip operation and its potential for growth.

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In his annual letter to shareholders, Jassy hinted at the possibility of selling racks of chips to third parties in the future, driven by the high demand for Amazon's chips. This move could have significant implications for the chip industry, with Amazon potentially disrupting the market for Nvidia Corp.'s graphics processing units.

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Amazon's efforts to expand its delivery capabilities also received attention, with the company investing $4 billion in bringing speedy delivery to shoppers in rural America.

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