Nvidia’s Worst Nightmare: Amazon’s Secret Weapon Is Stealing Customers with Better Prices

vm_admin
Nvidia’s Worst Nightmare: Amazon’s Secret Weapon Is Stealing Customers with Better Prices

By The Globe and Mail
Publication Date: 2026-02-09 20:53:00

Key Points

  • Amazon is a major buyer of Nvidia GPUs, but its data centers also run its custom Tranium AI chips.

  • Amazon claims Trainium delivers up to 40% better performance-per-dollar than comparable GPUs.

  • Anthropic is using Trainium heavily, suggesting a future in which competition eats away at Nvidia’s dominance.

Shares of Amazon(NASDAQ: AMZN) plunged on Friday after the company disclosed it would ramp up capital expenditures to $200 billion this year. Amazon is betting big on AI infrastructure: “…we are monetizing capacity as fast as we can install it,” said Amazon CEO Andrew Jassy in the fourth-quarter earnings call.

While the jury is still out on whether Amazon’s prolific AI spending will pay off in the long run, some of that spending will go toward a business that isn’t getting much attention from investors. Amazon has installed 1.4 million of its Tranium2 AI chips in its data centers, and the results have been spectacular. Revenue from Amazon’s custom chips, which include Tranium and Graviton CPUs, has reached an annual run rate of $10 billion and is growing by more than 100% annually.

Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »

Amazon is still a prolific buyer of Nvidia‘s (NASDAQ: NVDA) GPUs, but the success of Tranium puts a crack in Nvidia’s long-term growth story.

Image source: Getty…

Related Posts