Could This Be Amazon's Next Big Opportunity?
The company wants to dominate every market it operates in.
Overview
Amazon (NASDAQ: AMZN) is already a leader in several industries, including e-commerce and cloud computing. However, a company this successful, if it wants to remain so, should always be looking to improve and tap into new growth opportunities. That's what Amazon has been doing over the past few years, notably through its healthcare-related initiatives, as well as a new business line in which it will open its logistics network to other corporations. And now, Amazon is apparently actively exploring selling its Trainium franchise of custom artificial intelligence (AI) chips. Could this become an important growth driver for the company?
Image source: The Motley Fool.
The AI revolution is in full swing. Nvidia's (NASDAQ: NVDA) GPUs (Graphics Processing Units) have been instrumental in helping companies train and deploy AI models in recent years, and they should remain among the defining hardware of this era for the foreseeable future. However, Amazon and other hyperscalers started designing Application-Specific Integrated Circuits (ASICs) as alternatives to GPUs to decrease costs, improve margins, and boost efficiency. Amazon argues that its Trainium chips offer better price-to-performance than comparable GPUs. If Amazon starts selling these chips, it will almost certainly have a long list of customers, including AI start-ups that may opt for these lower-cost options, major corporations building internal AI systems, and more.
Details
Source
Originally published at www.fool.com.