Amazon Partners with Databricks, Boosts AI Capabilities with Trainium Chips

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Oct 16, 2024
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Amazon has entered a five-year agreement with Databricks, a competitor to Snowflake, to utilize Amazon's Trainium AI chips. This collaboration offers a cost-effective alternative to Nvidia GPUs for companies looking to develop and customize AI models.

The undisclosed terms of the agreement imply potential cost savings for companies aiming to enhance their AI capabilities. Databricks plans to pass on these savings to its clients, challenging Nvidia's stronghold in the AI accelerator market. In addition to using Amazon's chips, Databricks will also increase its usage of Nvidia GPUs through Amazon Web Services (AWS), which has generated over $1 billion in revenue for Databricks and remains its fastest-growing cloud partner.

AWS's Dave Brown noted that Trainium chips, designed specifically for AI tasks, can reduce AI development costs by 40%. Amazon also released the second version of its Trainium chip in November 2023 and offers the Inferencia line of AI chips for building and utilizing AI models.

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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.