Amazon is going to reduce its reliance on Nvidia and reveal its latest AI chips in coming December as reported by the Financial Times.
The new chip, Trainium 2, is developed by Annapurna Labs which is a chip startup Amazon acquired in 2015.
The chip is designed to enhance the efficiency of Amazon’s data centers, and it is also expected to lower the costs for Amazon Web Services customers.
The company’s capital spending is going to $75 billion in 2024 and is focused on technology infrastructure.
This will be surpassing the $48.4 billion spent in 2023.
Trainium 2, already being tested by companies like Anthropic, Databricks, and Deutsche Telekom, targets training the AI models and challenges the dominance of Nvidia in the AI processor market.
“We want to be absolutely the best place to run Nvidia,” said Dave Brown, vice-president of compute and networking services at AWS.
“But at the same time, we think it’s healthy to have an alternative.” Another AI chip from Amazon, Inferentia, is reported to be 40 percent cheaper for generating AI responses, according to Amazon.
Amazon, along with other big tech companies, is designing its own data center chips to support anticipated AI growth. Daniel Newman at The Futurum Group commented that – “Every one of the big cloud providers is feverishly moving towards a more verticalized and, if possible, homogenized and integrated [chip technology] stack”.
Annapurna Labs‘ work extends beyond AI chips. The company has also developed several generations of Graviton, an Arm-based central processing unit offering a low-power alternative to traditional Intel or AMD processors. “The big advantage to AWS is their chips can use less power, and their data centers can perhaps be a little more efficient,” said analyst G Dan Hutcheson of TechInsights.
Despite these developments, AWS and Annapurna have yet to significantly challenge Nvidia’s dominance in AI infrastructure. Nvidia reported $26.3 billion in revenue from AI data center chip sales in its second fiscal quarter of 2024, comparable to Amazon’s entire AWS division revenue for the same period.
While Amazon avoids direct performance comparisons with Nvidia, the company claims a four-fold performance increase between Trainium 1 and Trainium 2. “People appreciate all of the innovation that Nvidia brought, but nobody is comfortable with Nvidia having 90 percent market share,” noted Patrick Moorhead, a chip consultant at Moor Insights & Strategy.
Amazon’s continued innovation and investment in its chip technology highlight its commitment to providing more choices and reducing dependence on industry leaders like Nvidia.