Amazon boosts investment in custom AI chips to challenge Nvidia dominance

Amazon is increasing its investment in custom AI chips to reduce reliance on Nvidia, the current market leader. The company plans to showcase its new chip, Trainium 2, next month, which aims to improve efficiency in its data centers. Annapurna Labs, acquired by Amazon in 2015, is leading this effort. The new chips are already being tested by companies like Anthropic and Databricks. Amazon's Inferentia chips are reported to be 40% cheaper for AI model responses. In 2024, Amazon expects to spend around $75 billion on technology infrastructure, a significant increase from $48.4 billion in 2023. Other major cloud providers, including Microsoft and Google, are also investing heavily in developing their own chips for AI growth.