Insights from Amazon CEO Andy Jassy on Nvidia’s Market Outlook

Key Points

• Amazon has finalized a deal with Nvidia to purchase 1 million GPUs, expected to be delivered by the end of 2027.

• Amazon plans to spend approximately $200 billion on data center construction and outfitting this year, significantly increasing from $131.8 billion in 2022.

• Amazon’s AWS has a $364 billion total backlog, with $225 billion specifically for its custom Trainium chips, indicating a shift away from Nvidia’s GPUs.

Amazon, one of Nvidia’s largest customers, has signed a deal to acquire 1 million Nvidia GPUs by 2027, contributing significantly to Nvidia’s revenue. The agreement comes as Amazon ramps up spending on its cloud infrastructure, planning to invest about $200 billion this year compared to $131.8 billion last year. During recent earnings calls, Amazon CEO Andy Jassy highlighted a growing reliance on Amazon’s custom Trainium chips over Nvidia’s, with AWS’s overall backlog reaching $364 billion and the backlog for Trainium alone at $225 billion.

This shift raises concerns for Nvidia, as AWS’s increasing adoption of its own AI accelerators could diminish Nvidia’s dominance in the AI chip market, potentially impacting its future earnings growth.