More than half of Amazon (AMZN) Web Services’ (AWS) Bedrock—which is a cloud service that provides access to AI models—is now powered by the tech giant’s own custom AI chips. This is according to AWS Chief Marketing Officer Julia White, who spoke with The Information’s TITV in an interview. Interestingly, this is the first time that Amazon has shared specific details about how widely used its Trainium chips are in Bedrock, which also runs on Nvidia’s (NVDA) popular GPUs.
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It is worth mentioning that Bedrock allows customers to use AI models from companies like Anthropic (PC:ANTPQ), and until now, it was unclear how much of the service was powered by Amazon’s in-house hardware. White’s comments suggest that Amazon is relying more heavily on its own technology, which could help reduce costs and improve profit margins. Unlike Nvidia’s GPUs, Trainium chips are not graphics processors. Instead, they are designed specifically to accelerate AI training and model inference.
By using more Trainium chips, AWS can offer cloud services at a lower price. In fact, AWS already sells Trainium-based servers at a significant discount compared to those that use Nvidia’s chips. However, Amazon isn’t the only company looking to reduce its reliance on Nvidia. For instance, Microsoft (MSFT) Chief Technology Officer Kevin Scott recently stated that the tech giant is planning to rely more on its own custom chips in the future.
What Is the Price Target for AMZN Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Amazon stock based on 43 Buys assigned in the past three months. Furthermore, the average AMZN stock price target of $267.77 per share implies 23.3% upside potential from current levels.
