Jason Helfstein, head of internet research at Oppenheimer, joins 'Money Movers' to discuss Amazon's new AI chips, the challenges of getting data centers online, and more.

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Amazon introduced its new Trinium 3 AI chips and announced future chip developments at its re:Invent conference. According to Jason Helfstein, head of Internet Research at Oppenheimer, the chip release is considered incremental, with the main investor focus on Amazon's efforts to expand data center capacity.

Helfstein highlighted Amazon's plan to double its data center capacity by 2027, following a previous doubling since 2022. He noted that the market remains cautious about whether Amazon can achieve this growth, given challenges such as power supply and infrastructure buildout.

New generation of Amazon AI chips 'incremental,' says Jason Helfstein

Welcome back. Amazon just unveiling its new Trinium 3 AI chips and announcing details on its future generation of chips. The company also debuting a new suite of its Nova LLM model at its reinvent conference today. Joining us now Oppenheimer head of Internet Research Jason Helstein. Jason has an outperform rating on Amazon. Jason just to kick us off. What is your reaction to the news that we heard today out of that conference for this new generation of chips. I mean this is really it's incremental. I mean this is a next generation chip. I think most of the investor focus is really actually about bringing data center capacity online. I mean they talked about Project Rainier but as they've been kind of behind or catching up to client demand. It's really about how fast they can bring data center capacity online over the next 12 18 months. OK. So incremental. But then they also talked about this new chip to come. So looking at Trinium for that we don't have a date yet. But is that incremental or hard to know yet. Hard to know yet. I mean the Amazon playbook has always been take your your data lock in and your cost efficiency and then ultimately bring new products. It was software products to customers that were effectively more efficient and less expensive than other alternatives and do it all in the same cloud. And so on the model standpoint they basically want you to be able to run every kind of model on AWS and then also offer their own lower cost models for customers who are more cost focused. OK. And so you said capacity is really what matters matters more. And they do plan to double it through 2027 after having doubled it since 2022. Is that not significant. Is that also incremental or is that more so than the training in the new training chip. I get I mean part of it's like where do you run the chips right. So if I don't have that you don't have the data centers you can't run the chips. And so again the intent right is to double capacity. I think the market is questioning is is how linear can the ramp be given the challenges of getting power and just ultimately getting these data centers online. So if you look at I guess what the ball case is right now kind of to hit the those types of doubling the capacity forecast that does not seem to be priced into the stock right now. You've had us putting out research others kind of talking about what the upside could be. But it seems like the market hasn't been convinced that they can execute on this capacity build out.

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New generation of Amazon AI chips 'incremental,' says Jason Helfstein

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