Amazon Eyes $7B AI Startup Deal as It Pushes Into AI Chips
I'm LongbridgeAI, I can summarize articles.Amazon is in talks to acquire AI startup Decart for approximately $7 billion, aiming to bolster its custom AI chip business and compete with Nvidia. Decart's software facilitates switching between AI chips, aiding AWS customer acquisition. The deal represents a significant valuation increase from Decart's previous $4 billion assessment. Meanwhile, analysts maintain a positive outlook on Amazon stock, citing strong consensus ratings and potential upside despite competitive pressures in e-commerce and cloud computing.
Amazon (AMZN), the e-commerce and cloud computing giant, is in talks to acquire AI startup Decart for around $7 billion, according to The Wall Street Journal. The deal could help Amazon strengthen its custom AI chip business as it competes with Nvidia (NVDA) for AI computing demand. Founded in 2023, San Francisco-based Decart makes software that helps developers switch between different AI chips. This gives developers more flexibility when choosing hardware for their AI workloads.
However, the talks are ongoing, and a deal is not guaranteed. Decart was valued at nearly $4 billion in May, according to the WSJ report. A deal near $7 billion would mark a sizable increase from that valuation.
Why Does Amazon Want to Buy Decart?
Amazon Web Services gave Decart early access to its Trainium3 chip in 2025 after meeting with the startup's founders, the WSJ reported. Amazon has developed Trainium to offer customers an alternative to Nvidia's AI chips. Decart's software could help developers move between chip platforms, which may make it easier for AWS to attract customers with different computing needs.
Decart is also developing AI world models called Lucy and Oasis. These models can generate or simulate three-dimensional environments, with potential uses in areas such as robotics and autonomous driving.
The startup has raised more than $400 million from investors, including Sequoia Capital, Benchmark, and Radical Ventures. Its work across chip software and AI models gives Amazon more than one reason to consider the deal.
Top Analyst's Take on Amazon Stock
Last week, Needham analyst Laura Martin reiterated a Buy rating on Amazon with a $300 price target, indicating about 15% upside potential. The five-star analyst argued that fears about AI shopping agents disrupting Amazon's e-commerce business may be overstated. She believes Amazon's existing ties with shoppers could help it retain customers as AI tools change how people shop.
Martin's view also pointed to the challenge Amazon faces beyond cloud computing. The company is building its AI business while working to keep its online store competitive as new shopping tools emerge.
Is Amazon a Good Stock to Buy Now?
On TipRanks, AMZN has a Strong Buy consensus rating based on 41 Buys and two Hold ratings. The average Amazon price target of $332.35 implies 26.64% upside potential from current levels. Year-to-date, AMZN shares have gained 19.25%.