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Amazon's Tech Odyssey: Chip Delays, AI Expansions, and a Nuclear Future

Market BriefMonday, Oct 21, 2024 4:01 am ET

1min read

As of last week, Amazon (AMZN) experienced a 0.78% gain, marking a consecutive two-day increase of 1.12%. Over the past week, the stock edged up by 0.09%, contributing to a year-to-date rise of 24.38%, with a current market valuation of approximately $1.983 trillion.

Amazon's cloud computing arm, AWS, announced delays in launching new systems equipped with Nvidia's Blackwell chips, originally expected by the end of 2024. This delay, attributed to Nvidia's redesign of the chips, means Amazon won't receive mass-scale samples until early next year. AWS CEO Matt Garman noted adjustments to the schedule, emphasizing collaboration with Nvidia on initial samples while awaiting increased production.

The market closely monitors the rollout of Nvidia's chips due to high demand driven by AI developments. Despite the postponements, Nvidia anticipates substantial revenue in Q4. AWS plans to lead large-scale deployments with these new chips, providing a unique perspective on progress as other companies eye similar rollouts.

In a strategic move, Amazon has entered into a five-year agreement with Databricks, a competitor of Snowflake, to enhance its use of Amazon’s Trainium AI chips. This arrangement offers a cost-effective alternative to Nvidia GPUs. Databricks plans to leverage savings on chip costs to offer more competitive pricing, aiming to undermine Nvidia's stronghold. AWS's Trainium chip is designed specifically for AI tasks, potentially cutting AI development costs by 40%. Amazon continues to expand its AI capabilities with the release of the second version of Trainium in November 2023.

Further expanding its energy investments, Amazon has committed to exploring small nuclear reactor projects in collaboration with Dominion Energy near its North Anna facility. This venture includes supporting early-phase work with X-energy and aims to deliver significant power by the end of the 2030s, highlighting Amazon's diversification into nuclear energy.

The 2024 Amazon Ads Partner Awards recently concluded, recognizing Xmars for its innovative approaches in digital marketing. Xmars received accolades for leveraging Amazon Marketing Cloud to provide insightful consumer data and integrated marketing strategies. This recognition underscores the increasing importance of data-driven marketing strategies facilitated by advancements in AI and cloud technologies.

With these developments, Amazon continues to consolidate its leadership in technology and innovation, spanning sectors from cloud computing and artificial intelligence to energy. The company's strategic partnerships and investments reflect a broader ambition to influence key industries globally.

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