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The chips industry is bigger than ever – currently valued at $544 billion and expected to be worth more than $1 trillion by 2032, according to Precedence Research.
While Nvidia (NVDA) has the dominant lead in the industry, holding 80% of the GPU chips market, hyperscalers like Amazon’s (AMZN) Amazon Web Services (AWS) are looking to capitalize in the space by designing their own chips.
With the release of the new Graviton 4 chip, AWS aims to create a more efficient chip that can power its own cloud – promising 35% greater computing speeds and 75% more memory bandwidth.
What does this mean for the chip race? Rather than being direct competitors with Nvidia, Patrick Moorehead, a former AMD executive and now the CEO and analyst at Moor Insights & Strategy, refers to their relationship as “co-opetition.”
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What I'm holding up here is our fourth generation Graviton processor that will be launching soon, uh, globally.
Amazon Web Services is the world's largest cloud provider. Now, it's looking to boost profits by capitalizing on the AI boom, designing their own chips to power their cloud and capitalize off AI demand.
We get about three X the amount of compute and three X the amount of memory, about 75% more memory bandwidth. And this will deliver about 30% better performance versus Graviton 3.
Nvidia controls over 80% of the chip market. Hyperscalers like AWS are not looking to overtake Nvidia, but rather produce a more efficient chip. But could AWS compete with Nvidia?
I like to call it coopetition. Nvidia needs AWS, AWS needs Nvidia. If a customer is more focused on on on time to market, Nvidia based products that we offer on the AWS cloud, that is a great option. So it's not a zero sum game.
