Amazon.com Inc (NASDAQ:AMZN) is making significant strides in artificial intelligence with its homegrown AI chips.
In its Austin, Texas, chip lab, Amazon engineers are rigorously testing a new server design that features these AI chips, aiming to reduce reliance on Nvidia Corp’s (NASDAQ:NVDA) costly chips, Reuters reports.
Amazon’s efforts align with similar initiatives by rivals Microsoft Corp (NASDAQ:MSFT) and Google parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL).
Don’t Miss:
Rami Sinno, director of engineering for Amazon’s Annapurna Labs, highlighted the growing customer demand for more affordable alternatives to Nvidia. Annapurna Labs, acquired by Amazon in 2015, is integral to this development.
Trending: Don’t miss the real AI boom – here’s how to use just $10 to invest in high growth private tech companies.
Amazon has been developing its Graviton chips, which perform non-AI computing tasks, for nearly a decade. The latest AI chips, Trainium and Inferentia, offer significant cost savings.
“The offering of up to 40%, 50% in some cases of improved price and performance means it should be half as expensive as running that same model with Nvidia,” said David Brown, Vice President of Compute and Networking at AWS, according to Reuters.
Sales at AWS, which accounts for almost 20% of Amazon’s total revenue, grew by 17% to $25 billion in the January-March quarter compared to the previous year. AWS holds approximately one-third of the cloud computing market, with Microsoft’s Azure at about 25%.
See Also: America’s construction sites are desperate for Robots — here’s how to invest in a house-printing startup who’s making them and be a part of a $16 trillion industry.
Analysts view Nvidia as the primary beneficiary in the AI sector. Mizuho Securities reports that Nvidia controls 70% to 95% of the market share for artificial intelligence accelerators.
The Big Tech trio—Google, Microsoft, and Amazon—along with Oracle Corp (NYSE:ORCL)—contribute more than 40% of Nvidia’s revenue.
Amazon stock gained over 40% in the last 12 months, reaching a market cap of $1.87 trillion. Nvidia stock surged over 147% in the last 12 months and currently has a market cap of $2.76 trillion. Investors can gain exposure to the stocks through SPDR S&P 500 (NYSE:SPY) and iShares Core S&P 500 ETF (NYSE:IVV).
Price Action: AMZN shares traded higher by 1.47% at $182.50 premarket at the last check on Friday Morning.
Read Next:
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
Get the latest stock analysis from Benzinga?
This article Amazon Tests AI Chips in Texas Lab, Aims to Cut Nvidia Costs originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
