Amazon Challenges Nvidia with New AI Chips for Apple

Amazon.com’s cloud division has revealed new data center servers that feature its own artificial intelligence (AI) chips, aiming to compete directly with Nvidia. A major development in this announcement is that Apple has signed on as a customer to utilize these chips.

The new servers are built on 64 of Amazon Web Services (AWS)’s Trainium2 chips. These chips will be interconnected in a sophisticated supercomputer that will comprise hundreds of thousands of chips. This ambitious project will be assisted by the AI startup Anthropic, which is set to be the first company to utilize this massive supercomputer. Additionally, Apple executive Benoit Dupin has confirmed that Apple is also using Trainium2 chips for its needs.

Nvidia currently maintains a dominant position in the AI chip market with a share exceeding 70 percent, but it faces competition not only from traditional rivals like Advanced Micro Devices but also from its own customers. Companies such as Meta Platforms, Microsoft, and Alphabet's Google are all developing custom AI chips that they use for internal purposes and also make them available to external customers.

In this context, AWS has touted its advantage—that it can connect a larger number of chips together compared to Nvidia, which could lead to substantial cost savings for its customers. AWS chief executive Matt Garman has further indicated that an upgraded version, called Trainium3, will be unveiled next year, expanding their chip offerings and possibly enhancing their competitive edge against Nvidia.

Amazon, Nvidia, AI