In another wild turn for AI chips, Meta signs a deal for millions of Amazon AI CPUs

Amazon just hit a major Meta milestone, once again, for Amazon’s native chips. Meta has signed a deal to use millions of AWS Graviton chips to support its growing artificial intelligence needs, Amazon announced Friday.

Note that AWS Graviton is an ARM-based CPU (central processing unit, the chip that handles general computing tasks) and not a GPU (graphics processing unit).

While GPUs remain the preferred chip for training large models, once these models are trained, the AI ​​agents built on top of them cause a shift in the type of chip required. Agents create compute-intensive workloads such as real-time reasoning, code writing, research, and coordination involved in managing agents through multi-step tasks. The company says the latest AWS version of Graviton is specifically designed to handle AI-related computing needs.

This deal returns more Meta money to AWS rather than competitors like Google Cloud. Last August, Meta signed a six-year, $10 billion deal with Google Cloud, though until then Meta had been primarily an AWS customer that also used Microsoft Azure.

We can’t help but notice that AWS timed the announcement of this deal exactly with the conclusion of the Google Cloud Next conference, like a virtual smile on its cloud rival. Naturally, Google also makes its own custom AI chips and announced new versions of them at the show.

It’s true that Amazon makes its own AI GPU, too: Trainium, which, despite its name, is used for both training and inference — the stage that occurs after the model is trained, when it effectively processes prompts.

But Anthropic has already swooped in with a deal announced earlier this month that locks in many of those chips for years to come. The Claude maker agreed to spend $100 billion over 10 years to run workloads on AWS — with a particular focus on Trainium — while Amazon agreed to invest another $5 billion (bringing its total investment to $13 billion) in Anthropic in return.

Ultimately, the Meta deal allows Amazon to showcase a massive AI client as a proof point for its own domestic CPUs. These are the chips that compete with Nvidia’s new Vera CPU, which is also based on ARM and designed to handle AI workloads. The difference, of course, is that Nvidia sells its chips and AI systems to enterprises and cloud providers (including AWS). AWS only sells access to its chips through its own cloud service.

Earlier this month, Amazon CEO Andy Jassy took aim at Nvidia and Intel in his annual letter to shareholders, saying the companies want better price-performance ratios in AI, and that he intends to win deals on that basis. It also means that the pressure couldn’t be greater on Amazon’s internal chip-building team to deliver the product, a team we visited last month for an exclusive tour of their lab.