Amazon considers selling custom AI chips to challenge NVIDIA's dominance
What's the story
Amazon is in talks to sell its custom artificial intelligence (AI) chips to other companies, according to Bloomberg. The move is aimed at taking on NVIDIA's stronghold in the market. Peter DeSantis, Amazon's AI chief, confirmed these discussions were underway but didn't reveal any potential customers. He emphasized that the company sees a growing demand for AI infrastructure globally and is always looking for ways to reach more customers.
Chip performance
Trainium has already secured over $225 billion in revenue commitments
Launched in 2020, Amazon's AI accelerator, Trainium, has already found a few high-profile customers such as OpenAI, Uber Technologies Inc, and Anthropic PBC. The chip generates revenue commitments of over $225 billion. In April this year, CEO Andy Jassy hinted in his shareholder letter that Amazon could sell racks of its chips to third parties as part of a larger strategy to pivot the company toward AI.
Market competition
Cloud computing giants developing alternatives to NVIDIA's GPUs
Amazon and other cloud computing giants have been working on their own alternatives to NVIDIA's popular graphics processing units. The AI boom has not only boosted cloud sales but also given rise to specialized AI cloud providers. It has also increased demand for "sovereign" services in Europe and other regions with local laws that usually require information and data processing within the host country.
Tech expansion
Google started delivering tensor processing units to select customers
In April, Alphabet CEO Sundar Pichai announced that Google would start delivering its NVIDIA GPU rival chips, called tensor processing units, to a "select group of customers" for use in their own data centers. Amazon is also following suit with Trainium amid rising demand for locally controlled computing resources outside the US. DeSantis said, despite calls from Europe to reduce reliance on US technology or eliminate it, Amazon Web Services (AWS) business has not been affected by this trend.
Sales success
DeSantis dismisses concerns about potential impact on cloud business
The third version of the Trainium chip, which started shipping earlier this year, is already "largely sold out." Amazon has also seen strong interest in a fourth version expected to launch next year. DeSantis dismissed concerns that selling Trainium outside AWS would hurt the company's cloud business. He said there's "so much underconsumption in AI" and isn't worried about it impacting their operations negatively.