Amazon Unveils AI Chip with 50% Performance Boost, Rivals NVIDIA

Amazon has introduced its newest AI chip, claiming a performance increase of up to 50%. This development is part of Amazon's efforts to reduce its dependence on NVIDIA’s expensive chips and provide cost-effective solutions for AWS AI cloud services.

Cutting-Edge Chip Development

At Amazon’s chip lab in Austin, Texas, engineers recently tested new servers equipped with these advanced AI chips. Rami Sinno, the director of engineering at Amazon’s Annapurna Labs, shared that these chips aim to compete directly with NVIDIA’s offerings.

Strategic Shift

Amazon’s move to develop its own processors is designed to lower costs for its customers while handling complex calculations and processing large data volumes more efficiently. This initiative aligns with similar efforts by competitors Microsoft and Alphabet.

Amazon's AI Chip Journey

While Amazon is a newcomer in the AI chip field, it is an established player in non-AI processing with its Graviton chip. Graviton, now in its fourth generation, has been under development for nearly a decade. In contrast, Amazon's AI chips, Trainium and Inferentia, are more recent additions, tailored for specific workloads.

Cost and Performance Benefits

David Brown, AWS’s Vice President of Compute and Networking, highlighted that these new AI chips can deliver 40% to 50% higher performance than NVIDIA’s, at approximately half the cost. This promises significant savings and efficiency for AWS customers.

Revenue and Market Share

AWS remains a critical revenue driver for Amazon, accounting for nearly 20% of the company's total revenue. From January to March, AWS revenue surged by 17% compared to the previous year, reaching USD 25 billion. AWS controls about one-third of the cloud computing market, with Microsoft’s Azure holding around 25%.

Prime Day Deployment

During the recent Prime Day, Amazon deployed 250,000 Graviton chips and 80,000 custom AI chips to manage the increased platform activity. This shopping event set a record with $14.2 billion in sales, according to Adobe Analytics.