Amazon and Google Eat Into Nvidia’s AI Chip Supremacy

SAN FRANCISCO: In the three years since the artificial intelligence boom began, the one thing that has been safe to assume is that almost every big AI project starts with chips from Nvidia.
But last year, two of the tech industry’s most powerful companies — which also happen to be two of Nvidia’s biggest customers — made small but meaningful dents in Nvidia’s seemingly insurmountable business.
First, Amazon started packing thousands of its own AI chips into a massive network of computer data centres in Indiana, where they are being used by Anthropic, one of the world’s leading AI companies.
Then Google struck a series of deals with Anthropic. As Anthropic builds several of its own data centres in New York, Texas and other locations, Google is supplying chips for those facilities, said sources.
A wide variety of chipmakers have spent years trying to compete with Nvidia, including old-guard companies like Advanced Micro Devices, startups like Cerebras and tech giants like Microsoft and Meta. But the growing chip businesses at Amazon and Google are Nvidia’s toughest competition.
“Yes, Nvidia controls a large percentage of the market, but in this market, even small percentages are worth billions”, said Jordan Nanos, an analyst with SemiAnalysis, a data centre research firm.

In 2025, Amazon’s revenue from its AI chip, Trainium, reached “multiple billions”, the company’s CEO, Andy Jassy, said in a recent earnings call with investors. Google’s chips, called tensor processing units, or TPUs, generated revenue in the tens of billions, as Hock Tan, the CEO of Broadcom, which helps make Google’s chips, unexpectedly revealed a few weeks later.
Nvidia, now the world’s most valuable publicly traded company, still controls 92 per cent of the enormously lucrative market for the specialised chips needed to build and deploy online chatbots, image generators and other AI technologies. In 2025, its revenue from AI chips approached $200 billion.
Companies like Amazon and Google are walking a tightrope as they compete with Nvidia: While building their own chips and providing them to customers, Nvidia remains their main supplier.
Like most AI companies, Anthropic also relies heavily on Nvidia chips. But it has become increasingly critical of Nvidia for selling chips to China and is working to reduce its dependence. The result has been tens of billions of dollars in chip revenue for Amazon and Google — Anthropic’s two largest investors.
Google’s chip business began to turn heads in December when Tan said that the company had sold $10 billion in Google chips to Anthropic and that the AI startup had placed a second order for $11 billion.

Anthropic is installing these chips in data centres it is building with a company called Fluidstack, sources said. As Fluidstack takes on debt to build these data centres, Google is also backstopping the deal, meaning it has agreed to repay the debt if Fluidstack is unable to, the people said.
Since 2017, Google has leased TPUs to other companies via its cloud computing services. But its pact with Anthropic took a new approach: For the first time, Google allowed a company to install these chips in a data centre that did not belong to Google.
The arrangement was driven in part by Anthropic’s determination to maintain strict control over its AI technologies. Dario Amodei, Anthropic’s CEO and other company executives believe AI is growing increasingly dangerous, so they aim to ensure that no one — not even Anthropic’s close partners — can lay hands on the company’s raw software code. By operating its own data centres, Anthropic hopes to keep this code under lock and key.
This unusual deal opened a window onto Google’s chip business, showing that revenue was climbing into the tens of billions of dollars.
“That is a lot of money”, said Andrew Feldman, the CEO of Cerebras. “They are selling an extraordinary volume of chips”.
Amazon started work on its AI chips about three years after Google. In the fall of 2023, it said it would invest $4 billion in Anthropic. Soon after, an Amazon executive sent a private message to an executive at another company saying Anthropic had won the deal because it agreed to build its AI using Amazon’s chips. Amazon, he wrote, aimed to create a viable alternative to Nvidia.

The next year, working alongside Anthropic, Amazon tailored a new version of its chip, Trainium 2, for the data centres now used to train and deploy AI.
Although the chips are not as powerful as chips from Google or Nvidia, Amazon is installing twice as many into each data centre, hoping to provide more computing power using the same amount of electricity.
As Amazon deploys more and more chips across the Indiana data centres and other facilities, its chip revenue is growing 150% every three months, said David Brown, a vice president in the company’s cloud computing division, Amazon Web Services.
“Growth is limited by how quickly we can get the chips out there”, he said in an interview.
While Anthropic is primarily driving Amazon’s chip revenue today, experts believe that such a prominent partnership can promote even bigger changes. When Anthropic uses chips from Amazon or Google, it shows the rest of the market that Nvidia chips are not the only option. — The New York Times
GRAPH POINTS
1. Nvidia controls 92 per cent of the market for the specialised chips. In 2025, its revenue from AI chips approached $200 billion
2. Although the chips are not as powerful as chips from Google or Nvidia, Amazon is installing twice as many into each data centre
3. When Anthropic uses chips from Amazon or Google, it shows the rest of the market that Nvidia chips are not the only option
4. Advanced Micro Devices and Cerebras recently agreed to provide AI chips to OpenAI, the maker of ChatGPT
5. Anthropic and OpenAI are striking deals with chipmakers other than Nvidia to get more computing power
6. Anthropic relies heavily on Nvidia chips. But it has become increasingly critical of Nvidia for selling chips to China. The result has been tens of billions of dollars in chip revenue for Amazon and Google — Anthropic’s two largest investors