Amazon Considering Sale of Own AI Chips

Amazon CEO Andy Jassy has announced that the company is considering selling its self-developed AI chips. This signals Amazon's commitment to continuing large-scale investments in its AI infrastructure amidst intensifying competition in the AI technology sector. In a public letter to shareholders, CEO Jassy stated that AI's growth trajectory is very high with even greater future growth potential, and that the company will invest aggressively to capitalize on these opportunities. He added that he is willing to accept a short-term decrease in cash flow by undertaking significant capital expenditure investments to achieve long-term positive free cash flow. Amazon plans capital expenditures of $200 billion this year, with a substantial portion expected to convert to revenue between 2027 and 2028.

The annualized revenue for AI services from Amazon Web Services (AWS), the cloud division, already surpassed $15 billion in the first quarter of this year. CEO Jassy explained that the estimated annualized revenue for Amazon's internally produced AI chip division has now exceeded $20 billion, and if chips produced this year were sold, the annualized revenue could have reached $50 billion. He added that demand for the chips is extremely high, and the possibility of selling chips by the rack unit exists in the future. At the end of this year's shareholder letter, CEO Jassy included the 1997 shareholder letter from Amazon founder Jeff Bezos.

Amazon has announced plans to invest an additional $12 billion in its Mississippi data centers, bringing the total investment to $25 billion and creating 2,000 jobs.