Amazon Web Services launches mega project to challenge Nvidia in the AI chip market

Amazon Web Services drives ahead of the competition with its Ultracluster and new AI chips, positioning itself as an innovative provider in the rapidly growing AI chip market.

12/4/2024, 5:39 PM

Eulerpool News Dec 4, 2024, 5:39 PM

Amazon Web Services (AWS), the cloud computing division of the tech giant Amazon, has announced an ambitious project to develop an AI supercomputer called "Ultracluster." This endeavor aims to reduce dependence on Nvidia, the currently dominant provider of AI chips. The supercomputer, which is expected to be operational in the USA by 2025, will be powered by hundreds of thousands of in-house developed Trainium chips and will be among the largest of its kind in the world.

The ultracluster is used significantly for the AI startup Anthropic, which recently received a four billion US dollar investment from Amazon. The project is codenamed "Rainier" and was developed as a collaboration between AWS and Anthropic. At the same time, AWS presented the new "Ultraserver" at its annual conference "re:Invent," which combines 64 Trainium chips in one package. This system is intended to meet the demands of modern AI models by being more cost-effective and powerful than existing solutions.

AWS attempts to challenge Nvidia, which dominates about 95% of the AI chip market, with its developments. According to IDC, this market will grow to a volume of $193.3 billion by 2027. AWS CEO Matt Garman emphasized the importance of alternative options: "Currently, there is only one choice in the GPU market: Nvidia. Our customers want more variety.

Apple is also testing AWS's Trainium2 chips and plans to achieve cost savings of up to 50%, highlighting AWS's attractiveness for companies seeking more efficient solutions for AI models.

AWS has gained a strategic advantage through the in-house development of hardware. This not only reduces dependence on external providers like Nvidia, but also allows for greater control over supply chains. According to AWS, the Trainium chip is produced in optimized manufacturing directly by the Taiwan Semiconductor Manufacturing Company (TSMC) and integrated into the company's own data centers.

While industry experts emphasize that Nvidia will continue to play a dominant role, AWS offers a promising alternative for specialized applications. Analysts like Chirag Dekate from Gartner highlight AWS's strength in less obvious areas like network technologies and its "Bedrock" platform, which provides AI models for businesses.

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