Amazon is exploring direct sales of its Trainium AI chips to external customers, aiming to compete with Nvidia and capture growing demand for AI infrastructure beyond its own cloud services.

What happened: Amazon is in talks to sell its Trainium AI chips directly to other companies for use in their data centers, according to Bloomberg News reporting on comments from Amazon's AI Chief Peter DeSantis. Amazon CEO Andy Jassy wrote in his April shareholder letter that it is "quite possible" Amazon would sell racks of its chips to third parties. The strategy targets international customers looking for localized data solutions.

Why it matters: Amazon is moving to compete directly with Nvidia and capitalize on global demand for AI infrastructure. According to DeSantis, Amazon executives said the decision to sell hardware outside of Amazon Web Services does not raise concerns about lost cloud revenue, with DeSantis stating "There's so much underconsumption in AI. I'm not worried about it." This suggests Amazon sees room to grow both external chip sales and its core cloud business simultaneously.

What to watch: The approach mirrors Google's recent announcement of plans to sell its custom chips to select external data centers. Amazon's pitch emphasizes localized data solutions for international customers, signaling where it will focus initial external chip efforts.