In more good news for Amazon, Snowflake signs $6B deal with AWS for AI CPU chips

Cloud data storage giant Snowflake has signed a new $6 billion, five-year agreement with Amazon Web Services. This deal significantly expands Snowflake's commitment to AWS, as the company has historically run its operations on the platform and generated substantial revenue through AWS Marketplace. The increasing adoption of Snowflake's AI building tool, Cortex AI, is a key driver for this increased spending.

What’s particularly notable is Snowflake’s decision to secure more access to AWS’s homegrown ARM-based CPU chip, Graviton. This move underscores a broader industry trend where companies are seeking specialized hardware to support the evolving demands of AI, especially as AI applications move beyond training to daily usage and automation.

Traditional CPUs are crucial for most AI tasks beyond initial training and reasoning, particularly for AI agents. Amazon CEO Andy Jassy has previously highlighted the cost-effectiveness and performance benefits of Amazon’s own AI chips compared to competitors. This emphasis on in-house chip development positions AWS as a strong contender in the competitive AI infrastructure market.

This deal is part of a larger trend of major companies, including Meta, opting for AWS’s Graviton chips to meet their growing AI compute needs. These multi-billion-dollar agreements signal a shifting landscape in the AI chip market, where cloud providers are increasingly developing their own competitive CPU offerings. While Nvidia remains a dominant player, the emergence of in-house chips from companies like Amazon, Google, and Microsoft is creating a more diverse and competitive environment for AI hardware.