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Amazon Considers Selling In-House Chips to Other Companies
CEO Andy Jassy Says Silicon Unit Could Exceed $20 Billion in Annual Revenue
Key Takeaways:
- Amazon is considering selling its in-house chips to other companies, CEO Andy Jassy said April 9 in his annual shareholder letter.
- Jassy said the silicon unit is on pace for more than $20 billion annually and could reach a $50 billion run rate amid AI-driven chip shortages.
- Amazon may sell chip racks to third parties while continuing AWS rentals and investing $4 billion to speed deliveries in rural America.
Amazon.com Inc. is considering selling its chips to other companies, CEO Andy Jassy said April 9, adding that the cloud-computing giant鈥檚 in-house silicon unit is on pace to bring in more than $20 billion over the course of a year.
The disclosure offers a rare glimpse into the scale of Amazon鈥檚 in-house chip operation, which produces general-purpose computing and AI accelerators, as well as chips that make the company鈥檚 servers run more efficiently.
Today, Amazon rents that hardware to customers of Amazon Web Services, the cloud-computing unit. But demand for processors capable of building artificial intelligence models has strained supply and sent companies looking for alternatives to Nvidia Corp.鈥檚 market-leading graphics processing units.
鈥淭here鈥檚 so much demand for our chips that it鈥檚 quite possible we鈥檒l sell racks of them to third parties in the future,鈥 Jassy said in his annual letter to shareholders.
The Amazon chief, who took the reins almost five years ago, said the chip business would have a $50 billion annual run rate if it were an independent business selling semiconductors to AWS customers and other third parties.
Jassy also touted Amazon鈥檚 $4 billion effort to bring speedy delivery to shoppers in rural America.
Amazon ranks No. 1 on the Transport Topics Top 100 list of the largest logistics companies in North America, No. 15 on the TT Top 100 list of the largest private carriers and No. 1 on the TT Top 50 list of the largest global freight companies.
