Amazon is negotiating to acquire Decart, an Israeli artificial intelligence infrastructure company, for $7 billion, according to Wall Street Journal reporting. The target builds generative AI acceleration chips and real-time inference engines. The valuation represents a 23x forward multiple if Decart's reported $300 million trailing revenue run rate holds through Q2. No term sheet has been signed.
Decart ships custom ASICs optimized for transformer models and multimodal video generation, competing directly with Nvidia's H100 inference product line. The company operates two fabrication partnerships in Taiwan and employs 340 engineers, most in Tel Aviv. Amazon has run pilot programs with Decart hardware inside AWS regions since late 2024, testing latency on Bedrock inference endpoints. The acquisition would give Amazon full ownership of a chip design house capable of tapeouts within 9-month cycles, matching the cadence Apple maintains with its M-series roadmap.
The deal mirrors Amazon's 2015 purchase of Annapurna Labs for $350 million. That acquisition seeded the Graviton processor family, which now powers 40% of new EC2 compute instances and saves AWS an estimated $2.8 billion annually in Intel licensing and margin compression. Decart extends the same vertical integration logic into generative AI, where inference costs have become the largest variable expense for AWS customers running production workloads. Owning the silicon stack lets Amazon price Bedrock API calls 30-40% below comparable Google Vertex offerings without sacrificing gross margin. Alphabet and Microsoft both lack in-house inference ASICs at commercial scale.
The timing aligns with Amazon's Q1 2025 guidance, which projects AWS revenue growth accelerating to 21% year-over-year, driven entirely by AI service adoption. Decart would ship its first Amazon-branded chip generation in early 2026 if the deal closes by Q3 2025, based on typical integration and validation cycles. Operators should monitor two follow-on events: whether Amazon secures Taiwanese fab priority slots ahead of Nvidia's Blackwell ramp, and whether Anthropic—Amazon's $4 billion model partner—commits to Decart silicon for Claude inference by year-end. Both would validate the strategic margin thesis.
Israeli defense export clearances remain the deal's operational gate. Decart holds dual-use technology licenses that require Knesset committee approval for foreign acquisition, a process that averaged 110 days for comparable semiconductor transactions in 2024. Amazon has hired former Mossad deputy director Yossi Cohen as the transaction's government liaison, the same structure used in the Annapurna close.