Such talks about selling chips are in the early stages, the company tells TechCrunch, and stem from Amazon CEO Andy Jassy’s annual shareholder letter in early April, in which he said the company’s homegrown AI chips were so coveted that he was thinking about selling them.

“If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. 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 much of a challenge to Nvidia could Amazon be? A $50 billion competitor wouldn’t exactly tank Nvidia — which is currently on a $326 billion revenue run rate — if it keeps delivering quarters like the last one. But it’s akin to Intel’s annual revenues.

AWS has so far resisted selling its AI chips for a lot of reasons. The biggest is that the money AWS actually makes on its chips is a waterfall effect. Sure, it charges customers directly for the AI tokens those chips process on its cloud, but it also gets to charge for a host of other services companies need for their AI apps, including storage, security, networking, and monitoring services.