<p><strong>Amazon</strong> <span class="ticker-mention inline-flex items-center font-bold">(AMZN <span class="ml-1 text-red-900">3.38%</span>)</span> is already a leader in several industries, including e-commerce and cloud computing. However, a company this successful, if it wants to remain so, should always be looking to improve and tap into new growth opportunities. That's what Amazon has been doing over the past few years, notably through its healthcare-related initiatives, as well as a new business line in which it will open its logistics network to other corporations. And now, Amazon is apparently actively exploring selling its Trainium franchise of custom artificial intelligence (AI) chips. Could this become an important growth driver for the company?</p>
<div><img alt="Amazon logo." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzYwMzQvYW1hem9uLWxvZ28ucG5nJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NzYwMzQvYW1hem9uLWxvZ28ucG5nJnc9Mzg0MA"/>
<p>Image source: The Motley Fool.</p>
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<h2>Already a multibillion-dollar business</h2>
<p>The AI revolution is in full swing. <strong>Nvidia</strong>'s <span class="ticker-mention inline-flex items-center font-bold">(NVDA <span class="ml-1 text-red-900">1.86%</span>)</span> GPUs (Graphics Processing Units) have been instrumental in helping companies train and deploy AI models in recent years, and they should remain among the defining hardware of this era for the foreseeable future. However, Amazon and other hyperscalers started designing Application-Specific Integrated Circuits (ASICs) as alternatives to GPUs to decrease costs, improve margins, and boost efficiency. Amazon argues that its Trainium chips offer better price-to-performance than comparable GPUs. If Amazon starts selling these chips, it will almost certainly have a long list of customers, including AI start-ups that may opt for these lower-cost options, major corporations building internal AI systems, and more.</p>
<p>According to Amazon's CEO, if the company's AI chips segment were a stand-alone business, it would have an annual run rate of about $50 billion. Amazon generated $716.9 billion in sales last year, so this would be a drop in the bucket. But this business is also growing incredibly fast, according to Jassy. Within a few years, it may generate well over $100 billion in annual sales. And considering the AI tailwind is far from over, Amazon might ride this tailwind over the next decade. So, if Amazon does start selling its Trainium chips, it could be a great move for the company.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Amazon Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNWk4ucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0FNWk4ucG5nJnc9MTI4"/></div><div><h2>NASDAQ: AMZN</h2><div>Amazon</div></div></div><div><div><div>Today's Change</div><div>(-3.38%) $-7.92</div><div>Current Price</div><div>$226.34</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$2.5T</div><div>Day's Range</div><div>$225.55 - $232.32</div><div>52wk Range</div><div>$196.00 - $278.56</div><div>Volume</div><div>2.7M</div><div>Avg Vol</div><div>46.1M</div><div>Gross Margin</div><div>50.60%</div></div></div></div></section>
<h2>Multiple reasons to buy the stock </h2>
<p>Amazon's increased reliance on its internally developed chips could eventually help boost margins in its cloud computing segment, whose sales continue to grow rapidly. In the first quarter, AWS (Amazon Web Services) revenue rose 28% year over year to $37.6 billion. The segment's sales growth accelerated meaningfully quarter over quarter. Amazon remains the leader in cloud computing and still has a vast addressable market in that niche, as well as a strong competitive edge thanks to switching costs. Meanwhile, other aspects of the business are performing well, too. Amazon's advertising unit, which carries even higher margins than its cloud computing business, is growing at a good clip, too. It posted a revenue of $17.2 billion in the first period, up 24% year over year.</p><div><div id="foolcom_sidebar_top_container"><div><div><div></div><div></div><div></div></div></div><div></div></div></div>
<p>Amazon is improving its ad business thanks to agentic AI. The company is also turning to technology to boost margins in its e-commerce operations, notably through AI-powered robots. We can also mention Amazon's strong position in video and music streaming, as well as its large Prime member ecosystem, which provides a recurring source of revenue and potential monetization opportunities. The bottom line is that Amazon has a vast, diversified business that should perform well over the long run. The company's decision to sell its Trainium chips is just one more reason to buy the stock.</p><div id="article_pitch_container"><div><div><div></div><div></div><div></div><div></div><div></div><div></div><div></div></div></div><div></div></div><div id="promobox_container"><div><div><div></div><div></div><div></div><div></div></div></div><div></div></div>

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<p>Amazon is exploring selling its custom Trainium AI chips, a potential standalone business with a $50 billion annual run rate. This move aims to capitalize on the AI boom by offering cost-effective alternatives to Nvidia GPUs. The article highlights Amazon's strong performance in cloud computing (AWS), advertising, and e-commerce, citing robust revenue growth and margin improvements as key drivers for investment.</p>

- Amazon is exploring selling its custom artificial intelligence (AI) chips, Trainium, as a potential growth driver in its already expansive business.  
- This segment could generate an annual run rate of about $50 billion, contributing to Amazon's rapidly growing cloud computing and advertising sectors.  
- Given its diversified operations and innovative approaches, Amazon's focus on AI and internal chip development presents a compelling case for investors.

Could This Be Amazon's Next Big Opportunity?