Amazon’s cloud service challenges Nvidia with new AI chips, to be used by Apple

Amazon.com’s cloud unit on Tuesday showed new data-centre servers packed with its own artificial intelligence (AI) chips that will challenge Nvidia, with Apple coming aboard as a customer to use them.

The new servers, based on 64 of Amazon Web Services (AWS)’ Trainium2 chips, will be strung together in a massive supercomputer with hundreds of thousands of chips, with the help of AI start-up Anthropic, which will be the first to use it. Apple executive Benoit Dupin also said that Apple is using Trainium2 chips.

With more than 70 per cent market share, Nvidia dominates the sale of AI chips, and traditional chip industry rivals such as Advanced Micro Devices are rushing to catch up.

But some of Nvidia’s most formidable competitors are also its customers: Meta Platforms, Microsoft and Alphabet’s Google all have their own custom AI chips. While Meta’s chip powers internal operations, Amazon and Google use their chips internally but also market them to paying customers.