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Cloud data storage giant Snowflake has signed a new five-year, $6 billion agreement with Amazon Web Services Announce Wednesday.
Snowflake has always run on AWS, although apparently these days it’s also available on Microsoft Azure and Google Cloud. For comparison, Snowflake has sold $7 billion worth of its services across the total AWS Marketplace since its founding in 2012, AWS says. So this new contract is getting close to all the money it brought in from that cloud.
It can do this because Snowflake customers have been accelerating their spending on AWS recently, Snowflake says, doubling in 2025 to $2 billion for that calendar year alone.
What is driving growth, of course, is artificial intelligence. Snowflake has been offering its own AI building tool, Cortex AI, for two years. It’s a logical tool: Snowflake is where a lot of enterprise data resides. The AI tool can provide features such as textual interface for database queries (just ask in regular language), summary reports, etc.
Of particular note is that Snowflake signs this contract for more access to AWS’ home-grown ARM-based CPU chip, Graviton.
As AI moves from training to everyday use to automation via agents, CPU usage has skyrocketed. While GPUs handle training and inference, CPUs handle most of the remaining tasks associated with AI, especially agents.
Amazon CEO Andy Jassy Last month he bragged about Amazon’s homegrown AI chips It offers “better price performance” than Nvidia’s offerings, although AWS still uses Nvidia chips in its cloud. Demand is so high for AI processing that cloud providers like AWS are deploying chips as quickly as they can. Furthermore, all major AI modellers (and many other AI offerings) have designed their applications specifically for Nvidia chips.
However, Amazon’s own chips are a less expensive option for the cloud giant to deploy. Amazon, ever the price-conscious company, says it passes those savings on to its customers.
Consequently, these chips attract new deals worth billions of dollars. Last month, for example, AWS signed a deal to offer it Millions of Graviton chips to Meta To meet its growing needs for artificial intelligence computing. This was a big win for AWS because Meta had signed a $10 billion deal with Google Cloud a few months earlier.
What’s more, these deals serve as notice to Nvidia that competitive CPUs from cloud giants are trying to come to lunch. Google has also been manufacturing its own AI chips for years. Microsoft just launched Maia AI chip in January.
It’s no surprise that Nvidia CEO Jensen Huang said last week that he’s more than willing to defend and even grow his turf. His company’s new AI CPU, called Vera, It represents a “completely new” market worth $200 billion for NvidiaHe made the announcement after posting another record quarter last week. He said he had already sold $20 billion worth.
While Nvidia may not give up market share to Amazon or any cloud provider that easily, AWS’s multibillion-dollar cloud deals show how AI is raising its boat. Whichever companies benefit most from the advent of AI in our work and home lives, cloud providers are getting their share.
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