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Analyst Ming-Chi Kuo has unveiled that, in light of the burgeoning wave of AI infrastructure development, Amazon is poised to embark on developing its proprietary processors for consumer electronics. This strategic move is aimed at slashing chip costs and liberating capital for AI investments. Presently, Amazon's free cash flow is somewhat constrained, with a mere approximately $1.2 billion recorded in the first quarter of 2026. Amazon has set its sights on progressively adopting a Chip-on-Time (COT) model for processor development, mirroring its approach with the AI server chip Trainium, starting from 2027. Under this model, Alchip Technologies will shoulder the responsibilities of back-end design and testing. It is projected that, following a seamless transition, annual shipments could soar to a staggering 40 million units.
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