Amazon Plans External Trainium Chip Sales in Late 2027 as AWS Grows 39.3%
Key Facts
Amazon plans to begin selling its Trainium AI chips to customers outside AWS in late 2027, CEO Andy Jassy said on the third-quarter earnings call. The plan sets a future date for the company to enter the chip-sales market; it does not mean sales have already begun. Jassy said suppliers of advanced chips have limited allocations, and Amazon is balancing making chips available for external sale with using them within AWS services. That balance gives the company two ways to benefit from production capacity: generate revenue by selling chips or use them to provide cloud-computing services to AWS customers. Jassy did not link the plan to an aim of overcoming constraints at any particular supplier; he presented it as part of managing chip allocations between the two businesses.
The announcement comes as AWS growth accelerates. Sales at the unit rose 39.3% year over year to 46 billion dollars in the quarter ended September 30, according to Associated Press. Growth was 37% in the previous quarter, meaning sales growth accelerated between the two periods. The unit’s performance provides direct financial context for the chip-allocation decision: external sales could generate revenue from hardware, while using the chips in AWS could support a business that recorded quarterly sales of 46 billion dollars. Jassy said Amazon is installing an AI chip roughly every 14 seconds, pointing to the pace at which the company is deploying computing capacity internally. He added that customers are quickly absorbing available capacity, making the allocation of chips between internal use and external sales a matter tied to demand for computing power.
The expansion plans coincide with elevated capital spending to build the infrastructure needed for AI. Jassy told investors on Thursday’s call that he still expects capital spending of 220 billion dollars during 2026, much of it going toward building AI data centers. That spending puts operational capacity among Amazon’s priorities, as the company also looks for potential revenue from selling its chips outside its cloud services. The plan gives no start date for sales before late 2027, placing them on a longer timeline than the ongoing investment in data centers during 2026. The allocation decision between the two uses remains tied to the company’s assessment of chip-sale revenue against what it could earn by operating the chips through AWS over a longer period.
Jassy said AWS could become a business generating more than 1 trillion dollars in revenue within five to ten years. The estimate underscores the potential economic value of using the chips internally, as they could support cloud-unit growth if its expansion continues over that horizon. External sales, in turn, would allow Amazon to enter the chip market with its own product under a plan that sets late 2027 as the start date. The decision thus spans two businesses within the group: hardware sales and cloud services that rely on computing capacity. But Jassy’s comments about AWS’s future scale do not change the fact that the announced external sales remain a deferred plan, as the company faces limited allocations from advanced-chip suppliers.
In the initial reaction to Amazon’s results, the shares fell about 7% in extended trading when the results were released, according to Associated Press. The move followed the results announcement and does not by itself establish that the Trainium sales plan caused the decline. Amazon shares closed at 243.79 dollars on October 29, while TSM shares closed at 431.81 dollars the same day, according to EL7 data. The closing prices provide context for the two stocks’ moves in the regular session, while Amazon’s decline after the close points to the market’s response to the results as a whole. The chip plan remains part of the broader picture, which includes accelerating AWS growth and expected capital spending, without the closing-price data attributing the move to any single factor.
The stated date for the next step in the Trainium plan is late 2027, when Amazon intends to begin external sales, Jassy said. Until then, the announced trade-off is how to allocate chips between outside customers and AWS services, as the company continues building AI data centers during 2026. Jassy said customers are quickly absorbing available capacity, while describing advanced-chip suppliers as having limited allocations. Over a longer horizon, the CEO raised the possibility that AWS revenue could exceed 1 trillion dollars within five to ten years. These dates set out a clear sequence for the plan: capital spending on infrastructure in 2026, followed by the start of external chip sales in late 2027, alongside continued growth in AWS.