Amazon's AI Chip Business Hits $25 Billion Run Rate

Amazon's AI chip business is experiencing rapid growth, with an annual revenue run rate exceeding $25 billion. This represents a 25% quarter-over-quarter increase from the first quarter.

The company's CEO, Andy Jassy, highlighted this growth in Amazon's second-quarter results announcement. Trainium, Amazon's line of artificial intelligence (AI) chips, is in high demand among AWS customers, according to Jassy.

Custom AI chips like Trainium offer better price-performance compared to Graphics Processing Units (GPUs), making them an attractive option for companies looking to reduce expenses and lower their dependence on Nvidia's hardware. Amazon expects doubling down on Trainium to lead to meaningful operating margin gains within its cloud computing business.