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Amazon (AMZN) announced that its Trainium 3 chip is now available for customers, the latest challenger to Nvidia's (NVDA) strong hold on the market for AI processors. Amazon stock gained in Tuesday trading.
The Trainium chip is four-times faster than its previous generation, according to Amazon. "The company announced the chip as part of the Amazon Web Services (AWS) re:Invent conference, which kicked off Monday in Las Vegas.
"Customers are already seeing significant value from Trainium, with companies like Anthropic, Karakuri, Metagenomi, NetoAI, Ricoh, and Splash Music reducing their training costs by up to 50% compared to alternatives," the company said in a blog post. "Amazon Bedrock, AWS's managed service for foundation models, is already serving production workloads on Trainium3, demonstrating the chip's readiness for enterprise-scale deployment."
The re:Invent conference comes as Wall Street is debating the tech giant's ability to win AI-related cloud contracts. AWS is the largest cloud provider by market share but is facing challenges from Microsoft (MSFT) and Google parent Alphabet (GOOGL). The large language models that power AI application require massive amounts of computing power to train and then operate, offering a big market for cloud computing providers.
Google has particularly strong momentum, following a debut for its Gemini 3 model that excited Wall Street. A report last week that Facebook parent Meta Platforms (META) is interested in using Google's custom AI chips added to that excitement.
Trainium is key to AWS' focus on offering lower operational costs for its enterprise client to train and operate AI models. Amazon Chief Executive Andy Jassy told analysts in late October that its Trainium chip is a "multibillion-dollar business" growing 150% quarter over quarter.
Amazon Future Chip To Use Nvidia Tech
With Google's chips coming into focus as a potential challenger to Nvidia's dominance, analysts are closely monitoring the progress for Amazon's custom chips.
Amazon is also working on the next-generation Trainium4, it said in the news release. However, AWS remains a major customer for Nvidia chips. Amazon also is bolstering its collaboration with the AI chipmaker.
AWS said Tuesday that Trainium4 will be designed to support Nvidia's NVLink Fusion technology, which allows chip-to-chip communications.
"AWS will combine Nvidia NVLink scale-up interconnect and the Nvidia MGX rack architecture with AWS custom silicon to increase performance and accelerate time to market for its next-generation cloud-scale AI capabilities," according to a blog post from Nvidia touting the arrangement.
Amazon Stock Gains
On the stock market today, Amazon stock gained a fraction to 235.72. It is a busy week for the company, with Cyber Monday boosting e-commerce spending and Amazon separately announcing a new "ultrafast" delivery service in Philadelphia and Seattle.
Amazon stock is ahead roughly 7% year-to-date, helped by a 5.5% rally last week.
Shares jumped in late October after the tech giant posted stronger-than-expected Q3 results. But a broader slump for AI-related stocks has wiped out rally. Shares hit a November low of 215.18 on Friday, just above Amazon's 200-day moving average, before bouncing back.
Meanwhile, Amazon stock holds an IBD Composite Rating of 90 out of 99, according to IBD Stock Checkup. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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