Andy Jassy says AI data centers stay productive for decades — but Amazon's report suggests the chips inside them may have a short shelf life

Then he put a number on the servers, saying they “currently have a useful life of at least five to six years.” He added that Amazon Web Services (AWS) has a track record of “finding ways to extend the useful life of this equipment.”

Amazon cut its server life estimate to 5 years in January 2025

After finishing a useful life study in the fourth quarter of 2024, Amazon cut a subset of its servers and networking equipment from six years to five, effective January 2025. At the same time it decided to retire certain servers and networking equipment early. The company gave the SEC one reason: “an increased pace of technology development, particularly in the area of artificial intelligence and machine learning.”

Those decisions carried a price. Roughly $700 million off 2025 operating income from the useful life change, about $920 million in accelerated depreciation and related charges for the early retirements and another $600 million of that expected to land during 2025.

Depreciation is the mechanism underneath all of this — the way a company spreads equipment cost across the years it expects to use it. Stretch the assumption and current profits look better. Shorten it and the bill comes sooner.

Amazon has done both, repeatedly. Servers went from three years to four in 2020, four to five in 2022, and five to six in January 2024, before the 2025 reversal.

Trainium 2 chips are only about 20 months old

Internal planning documents from Amazon’s Indiana campus, reported August 6th by Business Insider, describe a server cycle already turning over. Amazon is stitching separate buildings there into a single machine it calls an “AGI SuperCluster” internally. Buildings folded in become “annexes” sharing core networking equipment with a neighbor instead of running their own. Some facilities on the campus, which the documents don’t identify as the annexes, are planning to put Trainium 3 servers in place of Trainium 2 systems.

Trainium 2 reached general availability in December 2024. The oldest units anywhere are about 20 months old.

Run that against Jassy’s own math and the gap opens up. If a break-even takes just under three years, and the free cash flow arrives in the two to three years after that, the economics need something close to the full five or six years of service. Hardware pulled at 20 months hasn’t reached break-even, let alone paid its way.

How Amazon answers the depreciation question

Hardware leaving a building is not the same as hardware being retired. A Trainium 2 redeployed to inference work elsewhere in Amazon keeps depreciating on schedule with nothing written off, and most of the Trainium 2 capacity Anthropic uses already runs inference, Semafor reported. Business Insider’s reporting also says the new work leaves Project Rainier’s servers alone, and no date is attached to the Indiana swap. A spokesperson told Business Insider the company is “always designing, upgrading, and improving our data center infrastructure.”