Amazon (NASDAQ: AMZN) is a company that’s done a terrific job of expanding its business over the years.
Not only is it an e-commerce giant, but many companies rely on its cloud business, Amazon Web Services (AWS), and that has become a major source of profit for the entire company
Amazon has also gotten involved in robotaxis, grocery stores, and healthcare. One of its most promising new opportunities, however, could involve selling artificial intelligence (AI) chips. Why selling chips could be a huge part of Amazon’s business in the future Amazon’s top AI chip, Trainium, was built with a heavy focus on efficiency and scale.
It’s effectively built by a company that needs to scale AI efficiently, making it ideal for tech companies looking to reduce costs and improve the profitability of their AI ventures. CEO Andy Jassy stated in the company’s letter to shareholders that “there’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.” Jassy estimates that the annual run rate for a theoretical chip business could be around $50 billion. That total includes the revenue that the stand-alone business would generate from AWS, but it’s nonetheless a positive sign of the type of growth that Amazon is seeing from this area of its operations.