How Amazon became one of the world’s top chip companies in a decade
When Amazon acquired chip design company Annapurna Labs in 2015, the AI boom was still years away. The bet was straightforward: if you design chips specifically for cloud workloads rather than relying on general-purpose hardware, you can deliver better performance at lower cost.
A decade later, that bet has become one of the fastest-growing businesses in Amazon’s history.
Amazon’s chip business—spanning Trainium for AI training and inference and Graviton for general cloud computing (and increasingly, agentic AI)—all based on the Nitro System for security and networking—recently exceeded a $25 billion annual revenue run rate, growing triple-digit percentages year over year.
Rather than relying solely on off-the-shelf processors, Amazon designs chips from the ground up for specific workloads. The approach is vertically integrated: hardware and software engineers collaborate from chip design through server deployment, working backwards from the system to create silicon tailored for the workloads customers actually run.
How Amazon’s AI chip business reached a $25B revenue run rate