Nvidia May Have Just Eliminated Its Biggest Risk

NVDA locked in a major partnership expansion with AMZN's Amazon Web Services, with AWS committing to purchase an additional 2 million GPUs over the next two years. The deal addresses a key competitive concern: whether hyperscaler customers building their own custom chips would eventually displace NVDA's hardware.

AMZN has built a $25 billion annual revenue run rate from its proprietary chip business, yet continues to heavily invest in NVDA's latest GPU offerings. The dual-track approach signals that custom silicon and third-party accelerators can coexist without cannibalizing each other's markets.

The partnership reinforces NVDA's position as hyperscalers scale AI infrastructure. AWS remains one of NVDA's largest channel partners, and the multi-year commitment provides revenue visibility through 2027. The volume—2 million units over 24 months—underscores sustained enterprise demand for high-performance compute, even as cloud providers develop in-house alternatives.

The move removes a persistent overhang: the risk that AMZN, INTC, and AMD custom chip efforts would erode NVDA's data center dominance. Instead, AWS is betting on a hybrid architecture where both owned and third-party silicon serve different workload profiles.