According to the Verget he move closely follows rivals Apple and Google, both of which have already developed and deployed custom AI hardware at various scales.

Amazon is unlikely to physically produce the chips, given its lack of both fabrication experience and a manufacturing presence in China, the news does pose a risk to the businesses of companies like Nvidia and Intel who want to see their AI chips everywhere.

It's not clear when such a shift would happen, but the report notes Amazon has been trying to bolster its chipmaking abilities since it acquired Israeli chipmaker Annapurna in 2015.

Both companies have shifted large portions of their chipmaking expertise to AI and the future of the burgeoning field, and both make money by designing and manufacturing chips for companies like Apple, Amazon, and others.

Amazon, which seeks to stay competitive in the smart home hardware market and in the realm of consumer-facing AI products, has nearly 450 people with chip expertise on staff.

The plan is for Amazon to develop its own AI chips so Alexa-powered products in its ever-expanding Echo line can do more on-device processing, instead of having to communicate with the cloud, a process that increases response rate times.