Why Amazon’s AWS is so focused on chips

Amazon’s AWS (AMZN) made a series of AI-related announcements at its annual re:Invent conference, including a new AI chatbot called Q and an expansion of their relationship with Nvidia (NVDA). The company also announced a series of new chips, including the AWS Graviton4 and AWS Trainium2. As AWS CEO Adam Selipsky tells Yahoo Finance’s Allie Garfinkle in the video above, the chips are a part of the company’s push to improve price performance, especially given that customer needs are growing.

“These workloads, thees things that customers want to do aren’t going to be economically feasible unless we keep on dramatically improving price performance,” Selipsky says.

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

ALLIE GARFINKLE: Now, sort of as you– as you think about the chips part of this, it’s been that there’s been a chip shortage, a NVIDIA chip shortage. You’ve not– and announced a lot of chips today, right? Tell me about why there was a real emphasis on it in the keynote.

ADAM SELIPSKY: Sure. Well, again, it gets back to– I mean, we’re kind of boring in how, you know, we’re– we don’t change what’s important to us. So from the beginning of AWS over 17 years ago, we focused on choice and democratization, and putting powerful tools in customers’ hands. And then letting them decide what to do with them. We’re not paternalistic or parental, if you will, about, you know, here’s– here’s what– what you’re going to do with our technology, or here’s what the right technology is that you have to use.

So in the chip space, again, we talked about the long-standing partnership we have with– with NVIDIA. But about 10 years ago, we decided also, not instead of, but also in addition to working with Intel and AMD and other providers, that we needed to go all the way down to the silicon layer, all the way down to designing our own chips if we really want to push the envelope on price performance.

And so we came out with– we were the first cloud provider to come out with our own custom chip in, I think, 2018 with Graviton as a general purpose computing chip, followed by Graviton 2, followed by Graviton 3. And today for the fourth time in five years, we are shipping a new Graviton chip, Graviton 4. It’s right here. It’s on a slide. I’m not just talking about it.

ALLIE GARFINKLE: It’s real. It is here.

ADAM SELIPSKY: It’s real. We’re in preview today and shipping. And you know, other cloud providers are still just, you know, talking about, oh, we will have this. We will have that. So the reason why it’s important is the– the compute needs that people have has just– those needs are exploding so rapidly. The amount of data and the amount of storage required is exploding so rapidly. But these workloads, these things that customers want to do, they aren’t going to be economically feasible unless we keep on dramatically improving price performance.

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