Amazon challenges competitors with Nvidia’s “AI factories.”

Amazon on Tuesday announced a new product called “AI Factories” that allows major companies and governments to run their own AI systems in their own data centers. Or as AWS says: Customers provide the power and data center, and AWS subscribes to the AI ​​system, manages it, and can connect it to other AWS cloud services.

The idea is to meet the needs of companies and governments concerned with data sovereignty, or absolute control over their data so that it does not end up in the hands of a competitor or foreign adversary. An in-house AI factory means they don’t send their data to the modeler, nor even share hardware.

If the product name sounds familiar, it should. That’s what Nvidia calls its hardware systems filled with the tools needed to run AI, from its graphics processing unit (GPU) chips to its networking technology. The AWS AI Factory is actually a collaboration with Nvidia, the companies say.

In this case, the AWS factory will use a combination of AWS and Nvidia technology. Companies deploying these systems can choose Nvidia’s latest Blackwell GPUs or Amazon’s new Trainium3 chip. It uses AWS on-premises networking, storage, databases, and security, and can leverage Amazon Bedrock, an AI model selection and management service, and AWS SageMaker AI, a model building and training tool.

Interestingly, AWS is not the only giant cloud provider to install Nvidia AI Factory. In October, Microsoft showed off the first of several AI factories that it will roll out in its global data centers to power OpenAI workloads. Microsoft did not announce at the time that these extreme devices would be available for private clouds. Instead, Microsoft highlighted how it is relying on a range of Nvidia AI Factory data center technologies to build and connect new “AI Superfactories,” also known as new state-of-the-art data centers being built in Wisconsin and Georgia.

Last month, Microsoft also identified data centers and cloud services to be built in local countries to address the data sovereignty issue. To be fair, its options also include “Azure Local,” Microsoft’s own managed devices that can be installed on customer sites.

However, it is a bit ironic that AI is causing the largest cloud providers to invest heavily in enterprise data centers and hybrid clouds as happened in 2009 again.