Amazon is 'racing' to make next-gen AI chips faster, and cheaper than NVIDIA

Amazon is currently letting around half a dozen engineers test out a "closely guarded" new server design through its paces, according to the latest reports.

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In a new article from RReuters, the outlet reports that the server in question was "packed" with Amazon's artificial intelligence (AI) chips that will compete with the likes of NVIDIA and its market-leading AI GPUs. The news is coming directly from Amazon executive Rami Sinno, said on Friday to Reuters during a visit to the Amazon AI chip lab.

Amazon is developing its own AI processors to limit its future reliance on more expensive NVIDIA AI GPU offerings and the so-called NVIDIA tax. Amazon uses AI all across its Amazon Web Services (AWS) with the company planning to spend $100 billion on data centers used for AI in the future.

David Brown, Vice President, Compute and Networking at AWS said on Tuesday: "So the offering of up to 40%, 50% in some cases of improved price (and) performance - so it should be half as expensive as running that same model with NVIDIA".

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In the new Reuters report, the outlet explains that with its in-house AI chips, Amazon wants to help customers compute complex calculations and process "enormous" amounts of data "more cheaply".

Rami Sinno, the director of engineering for Amazon's Annapurna Labs, which is a part of its cloud business AWS, also said that customers were "increasingly demanding cheaper alternatives" to NVIDIA.

Amazon noticed that during its Prime Day 2024 sales, the company deployed 250,000 of its new Graviton AI chips, and 80,000 of its custom AI chips, to handle the surgery in activity across its platforms, said the company.