Amazon Takes On Nvidia With Cheaper AI Supercomputers, Servers

On Tuesday, Amazon.com Inc‘s AMZN cloud unit showcased fresh data center servers embedded with its artificial intelligence (AI) chips at the company’s Re:Invent event.

The new servers, dubbed Trn2 UltraServers, will target Nvidia Corp’s NVDA flagship server, packed with 72 of its latest Blackwell chips, Reuters reports. Nvidia commands the AI chips market with over 70% market share.

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Amazon Web Services disclosed Apple Inc AAPL as a customer for the AI chips during the event.

Amazon is building artificial intelligence supercomputers in collaboration with OpenAI rival Anthropic, which will feature hundreds of thousands of Amazon’s latest AI training chip, Trainium 2.

Apple executive Benoit Dupin told Reuters that Apple is already using Trainium2 chips, and AWS chief Matt Garman told Reuters that Trainium3 will debut in 2025.

Gadi Hut, the business development lead for AI chips at AWS, said that AWS can connect more chips than Nvidia and that some AI models can be trained at a 40% lower cost than Nvidia chips.

Amazon also announced expanded collaboration with Marvell Technology, Inc MRVL on AI and data connectivity products, which Bank Of America Securities analyst Justin Post deems mutually beneficial for the companies and will help alleviate some AWS dependence on supply-constrained Nvidia chips. Prior reports indicated Blackwell chips’ production challenges at Nvidia impacted AWS’ data center plans.

Amazon also announced an expanded partnership with Oracle Database, Orbital Materials, and AWS’ overhaul of the cloud contact center solution with new Generative AI solutions.

Price Action: AMZN stock is up 1.9% at $217.60 at last check Wednesday.

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