Amazon's New AI Supercomputer Will Increase Revenue!

Amazon's Rise in AI with Project Rainier

Amazon.com Inc. (NASDAQ:AMZN) has made a significant leap in artificial intelligence with the launch of its Project Rainier supercomputer, operational with approximately 500,000 Trainium2 chips. This new system enables Amazon Web Services (AWS) to capture a larger share of the AI training and inference demand, while holding the potential for billions of dollars in revenue growth by 2026.

Bank of America Securities analyst Justin Post has given Amazon an “Buy” rating with a target price of $272. Post emphasized that the Rainier Project is one of the world's largest AI training computers and noted that the system is being established across various data centers in the U.S., connecting UltraServers. This structure uses NeuronLinks to minimize latency.

Additionally, Amazon shared that the processing power for its AI partner Anthropic would increase by more than five times. The Claude model is expected to operate on over a million Trainium2 chips by the end of 2025. The analyst stated that the system’s launch may be delayed by a month, indicating that Amazon's capacity increase for extensive AI workloads has begun.

Post pointed out that Rainier's capacity could significantly enhance AWS's potential by 2026. AWS revenue is expected to grow by 19% annually in 2026. Post believes that the growing AI demand from Anthropic could materially improve AWS's results, forecasting an additional $6 billion in revenue likely to generate 4% extra growth by 2026.

Amazon's investments in its own technologies, such as Trainium chips and Nova models, are considered a critical strategic move to differentiate AWS in the competitive AI market. AWS CEO Matt Garman mentioned that these chips outperform general-purpose alternatives, while Post added that Amazon's approach using internal resources could enhance AWS margins by reducing training and inference costs.

However, investors remain skeptical about whether the demand for Trainium-based systems will be confined to Anthropic. Post anticipates that the upcoming Amazon earnings conference and the re:Invent event could highlight the advantages of Rainier and potentially introduce Trainium3. He also stated that customer adoption in the next 18 months will be a critical juncture in determining whether Trainium will become a major platform in AI infrastructure or possess broader appeal.