AWS' custom chip strategy is showing results, and cutting into Nvidia's AI dominance
Ali Saidi, a distinguished engineer at AWS, likened the speed to a machine reading 100 music CDs a second.
Graviton4, a central processing unit, or CPU, is one of many chip products that come from Amazon's Annapurna Labs in Austin, Texas. The chip is a win for the company's custom strategy and putting it up against traditional semiconductor players like Intel and AMD.
But the real battle is with Nvidia in the artificial intelligence infrastructure space.
At AWS's re:Invent 2024 conference last December, the company announced Project Rainier – an AI supercomputer built for startup Anthropic. AWS has put $8 billion into backing Anthropic.
AWS Senior Director for Customer and Project Engineering Gadi Hutt said Amazon is looking to reduce AI training costs and provide an alternative to Nvidia's expensive graphics processing units, or GPUs.
Anthropic's Claude Opus 4 AI model is trained on Trainium2 GPUs, according to AWS, and Project Rainier is powered by over half a million of the chips – an order that would have traditionally gone to Nvidia.
Hutt said that while Nvidia's Blackwell is a higher-performing chip than Trainium2, the AWS chip offers better cost performance.
"Trainium3 is coming up this year, and it's doubling the performance of Trainium2, and it's going to save energy by an additional 50%," he said.
The demand for these chips is already outpacing supply, according to Rami Sinno, director of engineering at AWS' Annapurna Labs.
"Our supply is very, very large, but every single service that we build has a customer attached to it," he said.
With Graviton4's upgrade on the horizon and Project Rainier's Trainium chips, Amazon is demonstrating its broader ambition to control the entire AI infrastructure stack, from networking to training to inference.
And as more major AI models like Claude 4 prove they can train successfully on non-Nvidia hardware, the question isn't whether AWS can compete with the chip giant — it's how much market share it can take.
The release schedule for the Graviton4 update will be provided by the end of June, according to an AWS spokesperson.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
Amazon: Capex Weighs on Profit Forecast
Key Points Amazon beat top- and bottom-line expectations, posting 13% revenue growth and 33% growth in earnings per share. Amazon Web Services (AWS) revenue grew by 17%, but that falls short of the momentum rivals reported just a day ago. Amazon remains a powerful competitor with a lot of ways to win, but investors were closely scrutinizing profitability forecasts in light of continued spending on capital assets. 10 stocks we like better than Amazon › Here's our initial take on Amazon's (NASDAQ: AMZN) financial report. Key Metrics Metric Q2 2024 Q2 2025 Change vs. Expectations Revenue $148.0 billion $167.7 billion 13% Beat Earnings per share $1.26 $1.68 33% Beat AWS revenue $26.3 billion $30.9 billion 17% Met Advertising revenue $12.8 billion $15.7 billion 23% n/a Amazon's Focus on AI Implementation and Payoff Investors had big expectations for Amazon, and in particular the company's AWS cloud unit, following strong results from Microsoft (NASDAQ: MSFT). Amazon revenue and earnings were up 13% and 33%, respectively, beating expectations, and AWS sales grew by 17% to $30.9 billion. Amazon's release boasted about its largest Prime Day to date and new partnerships including a Nike (NYSE: NKE) storefront. But the focus was clearly on AI. CEO Andy Jassy in a statement said that "our conviction that AI will change every customer experience is starting to play out," noting the company's moves not just at AWS but across Alexa, robotics, and other areas. Amazon sees more growth ahead, predicting net sales to come in between $174 billion and $179.5 billion in the current quarter. That would be up 10% to 13% from a year ago, and even at the low end is above the $173 billion consensus. But all of that growth is coming at a price. Operating expenses in the quarter were up 11% to $148.5 billion, and free cash flow decreased to $18.2 billion for the trailing 12 months, from $53 billion a year ago. AWS's operating margin for the quarter fell to 32.9%, from 35.5% a year ago. Operating income in the current quarter is expected to come in between $15.5 billion and $20.5 billion. At the midpoint that suggests little growth over last year's $17.4 billion, and is slightly below analyst expectations. Immediate Market Reaction Investors were underwhelmed by the results. Amazon shares fell 3% in aftermarket trading following the release of the report but ahead of the company's call with investors. What to Watch The AWS growth, while impressive, on a percentage basis fell short of Microsoft's reported 34% growth at Azure. Microsoft surged post-earnings because the company successfully articulated the benefit of all of the AI spending. Investors will be eager to hear Jassy and other Amazon execs make the same case on the earnings call. Amazon is a lot more than AWS, posting 11% growth in product sales to $68 billion, while its advertising business was up 23% year over year. The company remains well positioned on many fronts, and is set up well to be a long-term winner. But in an environment where all eyes are on the investment -- and payoff -- of AI, investors have set a high bar on results and outlook. Helpful Resources Full earnings report Investor relations page Additional coverage Should you invest $1,000 in Amazon right now? Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,098,838!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Lou Whiteman has positions in Nike. The Motley Fool has positions in and recommends Amazon, Microsoft, and Nike. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Amazon: Capex Weighs on Profit Forecast was originally published by The Motley Fool 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
2 hours ago
- Yahoo
Nvidia's China Nightmare? H20 Chip Faces Backdoor Allegations in High-Stakes Trade Showdown
China's been turning up the heat on Nvidia (NASDAQ:NVDA), and not in a good way. This week, the country's top internet watchdog summoned Nvidia reps over what it calls serious security risks tied to the H20 chipa product Nvidia designed specifically to meet U.S. export rules. State media pulled no punches either. In a commentary published Friday, the People's Daily warned of potential chip backdoors triggering a nightmare, saying it couldn't allow infected semiconductors into its digital infrastructure. Nvidia responded firmly: Cybersecurity is critically important to us, adding that its chips don't contain any remote access pathways. Still, in today's geopolitical climate, that reassurance may not be enough. Warning! GuruFocus has detected 5 Warning Signs with NVDA. Here's where things get messier. Just a few weeks ago, the U.S. agreed to lift restrictions on H20 sales to China as part of a broader deal involving rare-earth magnetsmaterials critical for everything from smartphones to fighter jets. Commerce Secretary Howard Lutnick had framed the H20 resumption as a meaningful breakthrough after bilateral talks in London, and Treasury Secretary Scott Bessent said the magnet issue was solved. But with Beijing now putting the H20 back under the microscope, it's unclear whether Nvidia has actually received the licenses it needs to ship the chips. And if China decides the H20 isn't up to pareither technically or politicallythose sales may stall before they even start. Meanwhile, CEO Jensen Huang has been walking a tightrope. Fresh off a high-profile visit to Beijing, Huang praised China's AI momentum and national champions like DeepSeek, all while pushing back on the idea that Nvidia would ever install surveillance backdoors into its products. He called the suggestion not only false, but bad business. Still, the reality is this: Nvidia's H20, already weaker than its flagship GPUs, now faces a political test that could matter more than its specs. Investors watching the tech standoff might want to pay close attention to what happens nextbecause this chip is turning into a geopolitical bargaining chip. This article first appeared on GuruFocus.
Yahoo
2 hours ago
- Yahoo
2 Top Artificial Intelligence Stocks to Buy in August
Key Points Micron Technology trades at just 9.2 times forward earnings despite being Nvidia's preferred memory supplier. Alphabet runs businesses like YouTube, Waymo, Android, and Google Cloud, giving it many paths to future growth. Both stocks look undervalued next to their AI peers despite playing crucial roles in the artificial intelligence (AI) revolution. 10 stocks we like better than Alphabet › Many artificial intelligence (AI) specialists have seen their stocks skyrocket in the last couple of years. At the same time, some of the best names in the AI boom have been left behind. In particular, memory chip maker Micron Technology (NASDAQ: MU) and online services giant Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) look like fantastic buys right now. Their modest stock valuations don't reflect their massive growth opportunities. So if you're looking for an AI stock to buy in August, you should give Google's parent company and Micron another look. Read on and I'll get you started. Micron Technology looks like a bargain right now The memory chip market is notoriously cyclical. The handful of leading chip suppliers never seem to be ready when another tech trend results in massive demand for digital memory (smartphones, AI, and increasingly computerized cars are just three examples). Then they build out their manufacturing facilities until the demand driver fades out or the new supply simply grows too large. That's where unit prices drop, the memory industry goes into a mini-recession, and investors wait for the next surge in demand. You can see these cycles on Micron's stock chart, with a semi-predictable roller coaster ride with peaks and valleys. Importantly, each new top tends to be much higher than the last one. From that perspective, the AI-driven memory boom has been going on for about two years now. Some of the industry's cycles have seen two-year upswings followed by similar-sized downswings. And Micron's stock has gained 61% in the past two years -- maybe it's time for a correction? Some market makers sure seem to feel that way. Micron's stock trades at just 9.2 times forward earnings estimates today. Its price-to-earnings-to-growth (PEG) ratio is a minuscule 0.2. As a reminder, a PEG ratio around 1.0 indicates a fair valuation, in terms of proven profits and upcoming growth. Values in Micron's range suggest that investors aren't convinced by optimistic growth targets, or worried about the company's financial future, or both. But Micron's sales rose by 58% in the past two years, while trailing free cash flows swung from a $4.7 billion negative reading to $1.9 billion of positive cash profits. Micron is the preferred memory provider for Nvidia's (NASDAQ: NVDA) latest and greatest AI accelerators. Modern smartphones ship with lots of extra memory in order to handle their built-in AI functions. In short, the growth catalysts just keep coming. Micron is playing a very active part in the AI revolution, but the stock is acting like it's just another short-lived upswing. If you believe that AI will drive business growth for years to come, Micron should be on your short list of stocks to buy right now. Alphabet is playing the long game Alphabet's stock has gained just 3% in 2025. That's far behind Nvidia's 31%, or even the 8% increase in the S&P 500 (SNPINDEX: ^GSPC) market index. And in the valuation corner, the Google parent's stock could double in price and still look affordable next to market darlings like Nvidia. That approximate ratio holds firm across many different valuation metrics, from price-to-earnings to cash-flow valuations. Moreover, I think of Nvidia as a one-trick pony while Alphabet always has another trick up its sleeve. Let me explain. Sure, Nvidia's pony is an incredibly impressive racehorse that has taken Nvidia's business results to lofty heights in recent years. Still, I wonder what might happen to its high-flying stock if and when another chip maker starts winning large AI system contracts under Nvidia's nose. I'm not even speculating here. Longtime Nvidia rival Advanced Micro Devices (NASDAQ: AMD) already offers a competitive solution in its Instinct product range. Furthermore, major buyers such as Alphabet and Amazon are designing their own custom AI chips nowadays. I'm not convinced that Nvidia's golden years will last much longer. At the same time, Alphabet was built to last. The online search and advertising market won't be there forever, and the Google parent has been preparing for that sea change since forever. Alright, since 2014. Same thing in this ever-changing tech sector. Alphabet runs a leading media-streaming platform (YouTube), an early robotaxi specialist (Waymo), and the world's busiest mobile platform (Android). The Google Cloud service isn't dominating its market, but puts up a serious fight while developing cloud-based AI tools. Looking ahead, the company's next big idea might be medical research, or remote internet access, or maybe something I haven't heard of yet. Either way, Alphabet plans to stick around for decades, and its stock is on fire sale right now. Alphabet is pretty much always a decent buy -- it's just an even better idea these days. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,098,838!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Anders Bylund has positions in Alphabet, Amazon, Micron Technology, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy. 2 Top Artificial Intelligence Stocks to Buy in August was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
