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Is Amazon's Trainium chip the 'dupe' that could finally disrupt Nvidia's AI dominance?

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In today's newsletter, Amazon's touting new hardware it hopes can help it unseat Nvidia as the king of AI chips.

What's on deck:

But first, I don't need the name-brand stuff.


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The big story

Amazon's affordable AI

'Dupes' are all the rage these days, so why not make one for AI chips?

That's basically Amazon Web Services' idea for breaking Nvidia's stranglehold on the AI market. The cloud giant made several announcements at its annual re:Invent conference focused on the cost efficiencies its tech can bring to AI development.

At the core is AWS' Trainium chip. The tech giant's homegrown chip is its answer to Nvidia's all-powerful GPUs, which are widely used for training AI models.

Chips are only half the battle, though. As the expectations for AI models keep rising, so does the number of chips needed to train them. Companies have to be creative about combining so many chips (and avoid overheating issues), and Amazon thinks it has a solution for that, too.

AWS CEO Matt Garman detailed how customers can get the most out of their AI chips with 'UltraServers' — multiple Trainium servers smartly pieced together — and the 'UltraCluster' — what you get when you combine multiple 'UltraServers.'

That might sound like a lot of fancy names and confusing terminology (and it is), but it boils down to AWS pitching itself as a cheaper way to leverage more compute as concerns grow about AI bottlenecks.

Amazon can't just rely on offering a cheaper alternative when taking on Nvidia.

Yes, diversifying your supply chain so you don't have to rely on a single company for a key piece of hardware is a good selling point.

Nvidia has a trump card, though: CUDA. The acronym (I could tell you what it stands for, but would it really matter?) represents a big moat Nvidia has around its business.

CUDA is a software platform that developers use to work with Nvidia GPUs. What started small in 2007 has evolved into a trove of training data, tools, and other assets that are helpful for customers building with AI.

It's a problem AWS has even acknowledged, at least internally. Documents viewed by BI's Eugene Kim repeatedly cited CUDA as the biggest hangup stopping customers from leaving Nvidia.

The CUDA conundrum could come to a head soon. AI startup Anthropic, which also uses Nvidia GPUs, is helping AWS build out its 'UltraCluster.' It's part of a $4 billion investment Amazon recently made in the AI startup, which includes Anthropic using AWS as its "primary cloud and training partner."


News brief

Top headlines


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What's happening today

  • US Supreme Court hears case on gender-affirming care for transgender youth.
  • French Prime Minister Michel Barnier's minority government faces two votes of no confidence in Parliament.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Spriha Srivastava, UK bureau chief, in London. Amanda Yen, fellow, in New York. Lisa Ryan, executive editor, in New York. Milan Sehmbi, fellow, in London.

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