Amazon hopes to challenge Nvidia more directly by selling its AI chips
AWS is in talks to sell its chips to other data centers. CEO Andy Jassy has said this represents a $50 billion opportunity for the company. If Amazon Web Services has its way, the cloud giant is going to push even deeper into Nvidia's market, in what might be one of the biggest challenges to Nvidia's AI chip dominance we've seen so far.
Key Takeaways
- Amazon's AI chief Peter DeSantis told Bloomberg that AWS is in talks to sell its AI chip Trainium to other companies for use in data centers.
DeSantis declined to specify which companies could be the buyers of such chips.
- " How much of a challenge to Nvidia could Amazon be?
A $50 billion competitor wouldn't exactly tank Nvidia - which is currently on a $326 billion revenue run rate - if it keeps delivering quarters like the last one .
- Sure, it charges customers directly for the AI tokens those chips process on its cloud, but it also gets to charge for a host of other services companies need for their AI apps, including storage, security, networking, and monitoring services.
Equally importantly, Amazon has touted the capacity of its chips has been selling out faster than it can produce them.
- So selling its chips to others means it would likely have to leave current customers on waiting lists, unless it could somehow manufacture a surplus of chips through its manufacturing partners such as TSMC.
But it would have to miraculously elbow Nvidia out of the way to do that with TSMC, which has recently supplanted Apple to become the foundry's largest customer.
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Stats & Key Facts
- #CEO Andy Jassy has said this represents a $50 billion opportunity for the company.
- #CEO Andy Jassy has said this represents a $50 billion opportunity for the company.
- #"If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion.
- #A $50 billion competitor wouldn't exactly tank Nvidia - which is currently on a $326 billion revenue run rate - if it keeps delivering quarters like the last one .
Amazon's AI chief Peter DeSantis told Bloomberg that AWS is in talks to sell its AI chip Trainium to other companies for use in data centers. DeSantis declined to specify which companies could be the buyers of such chips. Such talks about selling chips are in the early stages, the company tells TechCrunch, and stem from Amazon CEO Andy Jassy's annual shareholder letter in early April, in which he said the company's homegrown AI chips were so coveted that he was thinking about selling them.
"If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. There's so much demand for our chips that it's quite possible we'll sell racks of them to third parties in the future. " How much of a challenge to Nvidia could Amazon be?
The biggest is that the money AWS actually makes on its chips is a waterfall effect. Sure, it charges customers directly for the AI tokens those chips process on its cloud, but it also gets to charge for a host of other services companies need for their AI apps, including storage, security, networking, and monitoring services. Equally importantly, Amazon has touted the capacity of its chips has been selling out faster than it can produce them.
For more details please read the original article at TechCrunch AI.
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