Amazon expresses interest in AMD's new AI chips

Even though fellow companies like AMD have seen their stock prices double this year, they are keen to break Nvidia's dominance in the sector, where it enjoys up to 95 percent market share. The recent unveiling of its new AI-focused chip from AMD was an attempt in this direction but did not get much traction on Wall Street.

Why AMD failed to excite investors

At an event on Tuesday, AMD CEO Lisa Su unveiled the company's MI300 chips with a maximum memory of 192 GB. AMD is aiming for mass production of these chips in the fourth quarter of this year.

In its latest offering, Nvidia has combined the CPU and GPU into one chip, called Grace Hopper chips, and promises 480GB of CPU memory. The memory of AMD's newest chip might seem like a trickle, but the company is confident it will work faster in customer workloads.

Even though the chip is being offered in two variants, the MI300X and MI300A, AMD did not name any prospective customer for the chip or any details on how it plans to achieve higher sales. This dented investor hopes on Wall Street, sending stock prices down.

Amazon considers AMD's chips

in an interview with Reuters, Su added that AMD was looking to offer its customers a menu of all the pieces needed to build large systems, unlike Nvidia, which is offering to build the entire system as part of its DGX Cloud offering or just its highly powerful chips, leaving it to customers to stitch together the rest of the parts.

Dave Brown, the vice president of cloud computing at Amazon, told Reutersthat he had seen Nvidia's offering, but they did not make much business sense. That was why the cloud service provider was now considering AMD's new chips.

Amazon Web Services (AWS) is also a user of Nvidia's latest H100 chips and offers them to its customers. However, it does so as part of its own system design, where it builds its servers from the ground up.

AWS and AMD have not reached an agreement on the chips yet, but the design that allows them to be plugged into existing systems is likely to benefit Amazon, making them a likely choice.

AMD CPU chips such as Bergamo have recently received a boost after Meta Platforms began ordering them for its data centers. The company will be hopeful that a similar uptick is seen for its AI chips when they are available later this year.