Jim Cramer admits he was wrong about Amazon — now calls its AI chips a real threat to Nvidia

Forget about online shopping and Prime subscriptions. According to Jim Cramer, Amazon is about to become one of AI’s most competitive chipmakers.

The “Mad Money” host recently admitted on CNBC that he “underestimated” the potential of Amazon’s lineup of in-house chips to drive value for shareholders. Specifically, Cramer called out Amazon’s “Trainium” chip line that focuses on training large-language models (LLMs) and generative AI (1).

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As Cramer told CNBC , these Trainium chips “have more long-term value than I thought and are more of a threat to Nvidia than I thought.” He added that the cheaper price tag for Amazon’s offering could help explain why Nvidia’s stock didn’t pop following its positive earnings call on May 20 (1).

Cramer turned from skeptic to supporter of Amazon shortly after sitting down with the company’s CEO, Andy Jassy, for a CNBC interview. When chatting about Amazon’s chips, Jassy said the officially reported “$20 billion annual run rate” likely “ underestimate[s] really the size of it .”​

Jassy went on to explain that that figure could easily balloon to a “$50 billion annual run rate” by selling the chips they’re producing this year to AWS and third parties. He also name-dropped the AI labs OpenAI and Anthropic, both of which have “multiyear, multi-gigawatt commitments to Trainium (2).”