Amazon is stepping deeper into the AI arms race with the release of the Trainium 3, a chip designed to compete with Nvidia’s dominant GPU hardware.
Available through Amazon Web Services (AWS), the new chips promise a fourfold increase in training speed over the previous version while maintaining the same energy footprint. The move will put the tech giant in competition with Google and Nvidia as the battle for infrastructure heats up.
Each cluster of Amazon’s new “UltraServers” can run up to 144 Trainium 3 chips, positioning them to handle large-scale language model training and other compute-intensive tasks. The launch is part of Amazon’s broader push to expand its AI infrastructure and reduce reliance on others.
Amazon’s push, combined with Google’s dominance in the AI model race, where it now has an 87% chance of securing the best by the end of the year, has reportedly seen OpenAI’s Sam Altman declare a “code red.”
AI and crypto
However, building more AI servers creates a problem that few tech giants can solve on their own: finding enough power and space. This is where crypto miners, who already have large data centers operating, step in and use some of their hardware to join the AI arms race and profit from it.
Amidst the arms race and following the 2024 halving of Bitcoin, which halved block rewards, several major mining companies began transitioning their energy-intensive operations to AI-ready facilities. Companies like Core Scientific, CleanSpark and Bitfarms are now viewed less as bitcoin bets and more as ancillary providers to hyperscalers.
Bitcoin miner-turned-neocloud firm IREN ( IREN ) has surged in the past month after striking a $9.7 billion AI cloud deal with Microsoft ( MSFT ) . Similarly, TeraWulf (WULF) entered into a $9.5 billion AI infrastructure joint venture with Google-backed Fluidstack.
These firms control gigawatts of power capacity with existing infrastructure ready for AI clusters that require advanced cooling and stable grid connections.
Bubble risk?
Still, the pivot comes with risks.
Miners are borrowing heavily to retrofit sites for AI workloads, and as investors grow wary of the sheer pace and scale of costs behind the “AI trade,” correlated risk assets (such as tech stocks and crypto) are under pressure.
Bitcoin has fallen more than 17% in the past 30 days, while the broader CoinDesk 20 (CD20) index lost 19.3% of its value over the same period. The tech-heavy NASDAQ 100 index is down about 1.5% over the past month, after recently recovering from a more than 7% drop in the period.
Analysts have warned that the AI infrastructure boom is reminiscent of past bubbles. OpenAI, for example, has committed trillions in infrastructure spending, funds it has yet to raise.
Much of the capital committed to the AI arms race is recycled through the same players selling AI chips or cloud services. If demand for artificial intelligence slows down, Bain & Co. predicted a shortfall of up to $800 billion for these companies, which would need $2 trillion in combined annual revenue by 2030 to finance the computing power needed for projected demand.
If demand for AI computing slows, these hybrid operations could face the same liquidity crunch that plagued the crypto sector in 2022. Such a hit would likely affect the broader market and depress risk assets sharply.
For now, however, miners are betting their company’s future on a new kind of gold rush powered by GPUs, not ASICs.
