Amazon chief executive Andy Jassy says demand for one of the hyperscaler’s products is booming.
In his 2025 Letter to Investors, Jassy says Amazon is positioning itself a direct competitor to Nvidia (NVDA), even though it wants to maintain a strong partnership with the leading chipmaker.
Jassy believes its chips business is opening new opportunities and will allow the firm to save tens of billions of dollars in AI CapEx per year.
“Our chips business is on fire, changes the economics for AWS, and will be much larger than most think. Virtually all AI thus far has been done on NVIDIA chips, but a new shift has started. We have a strong partnership with NVIDIA, will always have customers who choose to run Nvidia, and we will continue to make AWS the best place to run NVIDIA. However, customers want better price-performance.”
According to Jassy, he’s seen the same movie play out before, when Intel (INTC) dominated the CPU space until Amazon released its Graviton processor in 2018.
“Graviton, which has up to 40% better price-performance than other x86 processors, is now used expansively by 98% of the top 1,000 EC2 customers. The same story arc is unfolding in AI.
Our second version of our custom AI silicon (Trainium2) had about 30% better price-performance than comparable GPUs, and has largely sold out. Trainium3, which just started shipping at the start of 2026 and is 30-40% more price-performant than Trainium2, is nearly fully-subscribed. A significant chunk of Trainium4, which is still about 18 months from broad availability, has already been reserved.
And, Amazon Bedrock, AWS’s primary (and very fast-growing) inference service, runs most of its inference on Trainium. Demand for Trainium is booming.”
Jassy highlights that its chips business, including Graviton, Trainium, and Nitro, now prints more than $20 billion in annual revenue, growing at a triple-digit percentage rate year-over-year.
The news sent AMZN flying during the Thursday session, up 5.60% and trading at $233.65.
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