Amazon Microsoft Alphabet Build AI Chips to Reduce Nvidia Dependence

Amazon Microsoft and Alphabet are designing custom AI chips to cut reliance on Nvidia GPUs. Amazon's Graviton Trainium and Nitro chips generated $20 billion in Q1 2026 revenue with annual run rate revenue potential of $50 billion if sold externally. Amazon plans $200 billion in 2026 capital spending including heavy Nvidia GPU usage. Alphabet has developed tensor processing units for AI workloads. The shift increases Nvidia's chip sales despite growing internal competition.