Amazon enters AI chip market with Trainium and Inferentia chips, but won't necessarily threaten Nvidia's dominance

From Nasdaq: 2024-07-05 05:10:00

Nvidia dominates the AI chip market with about 80% share, due to the power of its GPUs. Amazon, a key player in multiple industries, is venturing into AI chips with Trainium and Inferentia chips for training and inference. Amazon’s AWS recently reached a $100 billion annual revenue run rate, showcasing its success in the AI industry.

While Amazon may attract customers looking to limit costs, premium chips like Nvidia’s remain popular among companies striving to lead in AI. Both Amazon and Nvidia are seeing success with their AI chip offerings, indicating a potential for multiple players to thrive in the market. Amazon’s entry into the AI chip space doesn’t necessarily threaten Nvidia’s market share.

Amazon’s AWS and Nvidia are both positioned to benefit from the growth in the AI chip market. Investors may consider The Motley Fool’s 10 best stocks for investment opportunities, with Amazon not making the list. The success of NVIDIA’s inclusion in a previous list suggests the potential for significant returns on investments in the recommended stocks.

The Motley Fool’s John Mackey, Adria Cimino, and Amazon subsidiary Whole Foods Market are associated with Amazon. The Motley Fool holds positions in and recommends Amazon and Nvidia. The mentioned disclosure policy applies to their positions and recommendations.



Read more at Nasdaq: Could Amazon Beat Nvidia at Its Own Game?