The Rise of AMAZON AI Chips: NVIDIA's Worst Nightmare

Amazon started the battle with Nvidia on the artificial intelligence chips market because it seeks to reduce its dependency on Nvidia.
Nvidia’s expensive chips power a significant portion of the AI cloud business at Amazon Web Services (AWS), which is Amazon's primary growth driver.

Amazon's chip development initiative aims to achieve two primary goals. First, it seeks to offer customers more affordable solutions for complex computations and large-scale data processing. Second, it strives to maintain Amazon’s competitive edge in the ever-evolving cloud computing and AI sectors.
This strategy mirrors the approaches of other tech giants like Microsoft and Alphabet, who are also developing custom chips to sustain their market leadership.

While Amazon's AI chips are still in their infancy, the company has a decade-long history of making and refining chips for mainstream applications. Notably, its general-purpose chip, Graviton, is now in its fourth generation. The company’s latest AI chips, Trainium and Inferentia, are still emerging but show great promise.