Amazon, Alphabet, and Microsoft accelerate custom AI chip production, reducing reliance on Nvidia while still purchasing record volumes.
Amazon, Alphabet, and Microsoft are expanding in-house AI chip development, aiming to cut dependence on Nvidia’s GPUs. The shift comes as data center demand surges, with Amazon’s custom silicon business alone nearing a $20 billion annual revenue run rate in Q1 2026.
Despite the push for self-sufficiency, all three firms continue buying Nvidia chips at record levels. Amazon CEO Andy Jassy noted the company’s chip division could generate $50 billion annually if operated independently, highlighting its scale.
Nvidia shares fell 6% Friday amid a broader semiconductor sell-off, reflecting investor concerns over long-term competition. The trend underscores a dual strategy: diversifying supply while maintaining Nvidia’s dominance in the near term.