If Amazon Web Services gets its way, the cloud computing giant could mount one of the most serious challenges yet to Nvidia’s dominance in AI chips, pushing deeper into the chipmaker’s territory. Peter DeSantis, Amazon’s AI chief, told Bloomberg that AWS is exploring sales of its Trainium AI chip to other companies for use in their own data centers. He declined to name potential buyers. “If our chips business was a standalone operation, selling chips produced this year to AWS and other third parties—as leading chip companies do—our annual run rate would be roughly $50 billion,” DeSantis said. “There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.”

How real a threat would Amazon pose to Nvidia? A $50 billion competitor wouldn’t exactly cripple Nvidia, which currently boasts a revenue run rate of $326 billion—assuming it keeps delivering quarters like its most recent one. Still, that figure is comparable to Intel’s annual revenue. AWS has historically resisted selling its AI chips directly for several reasons. The biggest is that the company’s profit from chips comes through a waterfall effect: it charges customers for the AI tokens processed on its cloud, but also for a host of ancillary services like storage, security, networking, and monitoring. Just as importantly, Amazon has touted that its chip capacity sells out faster than it can produce it. In a shareholder letter from April, CEO Andy Jassy noted that the current Trainium chip capacity sold out almost instantly—and that the next generation, Trainium4, which won’t be available for over a year, had already sold out too. This was before AWS formally added OpenAI to the models it serves. Selling chips to others would likely leave existing customers on waiting lists, unless Amazon could somehow manufacture a surplus through partners like TSMC. But that would require elbowing Nvidia aside at TSMC, which has recently surpassed Apple to become the foundry’s largest customer. AWS spokesperson Doron Aronson—who hosted me on a private tour of the AWS chip design facility—also confirmed the possibility. “While we’ve historically declined requests to sell chips directly, Andy noted it’s quite possible we’ll sell racks of them to third parties in the future,” Aronson said.

Meanwhile, Nvidia CEO Jensen Huang recently declared he’s found a brand-new $200 billion market for his company by selling CPUs for AI, not just GPUs—moving into Intel and AMD’s territory. But Jassy clearly has his own chip ambitions: a $50 billion market that would put Amazon more directly in competition with Nvidia’s world.