Amazon Ponders AMD's AI Chips Adoption; Boosts Competition in Market Dominated by NVIDIA

Amazon Web Services (AWS) is contemplating incorporating Advanced Micro Devices (AMD)'s latest artificial intelligence (AI) chips, potentially diversifying a market largely controlled by NVIDIA.

The remarks were made during an AMD event in which the chip company revealed its strategy for the AI market, which is at present dominated by arch-rival Nvidia Corp. AMD's shares experienced a 1% increase on the back of this news, after closing 3.6% lower on Tuesday, following AMD's failure to disclose the expected flagship customer for its AI chip, anticipated to be developed later this year.

Lisa Su, AMD's Chief Executive, said that AMD can now offer a range of all the necessary components for developing systems needed to operate services like ChatGPT, though customers can choose which components they need by making use of standard connections prevalent in the industry.

While AWS has not yet committed publicly to using AMD's new MI300 chips in its cloud services, Dave Brown, vice president of elastic compute cloud at Amazon, admitted that the company is considering their usage. He also revealed that AWS declined to collaborate on NVIDIA's DGX Cloud offering.

Brown stated that AWS prefers to design its servers from scratch, evidenced by the fact that the company began selling NVIDIA's H100 chip in March, but as part of systems of its own design.

The tech giant's first-quarter earnings report revealed that its cloud unit generated a whopping $21.4 billion, though it only grew at a rate of 16% in the first three months of this year, compared to its 37% growth rate of last year.

Despite these conditions, AWS will host its two-day security-focused cloud conference in Anaheim, California, starting Tuesday. This meeting is one of Amazon's annual events, showcasing its cloud offerings to current and potential clients seeking to store their valuable data on its extensive network of servers worldwide.

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