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Amazon is working on developing cheaper AI chips to compete with Nvidia, aiming to reduce the high costs associated with Nvidia's chips and improve the efficiency of its cloud computing services, Amazon Web Services.
New Amazon AI Chip Developments
In an effort to reduce its exposure to the so-called Nvidia tax—the high expense of using Nvidia chips—to run its artificial intelligence cloud business through Amazon Web Services, the company is working on its own processors, Reuters reports.
Amazon hopes that its indigenous chips will make it easier and cheaper for customers to do complicated computations and analyze massive quantities of data.
Microsoft and Alphabet, two of its competitors, are moving in the same direction.
According to Sinno, who is in charge of engineering for Amazon's cloud division AWS's Annapurna Labs, customers of Amazon are looking for less expensive alternatives to Nvidia.
In 2015, Amazon completed the acquisition of Annapurna Labs.
Although Amazon's artificial intelligence (AI) chip initiatives are in their early stages, the company's non-AI workhorse chip, Graviton, has been under development for almost a decade and is now in its fourth version. The Trainium and Inferentia AI chips are more recent creations.
Amazon's Cost-Efficiency Focus
"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," said David Brown, Vice President, Compute and Networking at AWS, on Tuesday.
Amazon Web Services (AWS) sales, which constitute slightly less than 20% of Amazon's total income, increased by 17% year over year to $25 billion in the quarter ending in March. About a third of the cloud computing market is controlled by AWS, while about 25% is held by Azure, Microsoft's cloud service.
Prime Day Chip Utilization
Amazon revealed that in order to manage the spike in activity across its platforms on its recent Prime Day, the business installed 80,000 special AI chips and a quarter million Graviton chips, as per Yahoo Finance.
According to Adobe Analytics, the shopping event brought in a record-breaking amount of revenue, which was $14.2 billion.
