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

Amazon just scored a major coup with Meta thanks, once again, to Amazon’s own homegrown chips. Meta has signed a deal to use millions of AWS Graviton chips to power its growing AI needs, Amazon announced Friday.

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

While GPUs remain the chip of choice for training large models, once those models are trained, AI agents built on top of them are causing a shift in the type of chip is needed. Agents create compute-intensive workloads like real-time reasoning, writing code, search, and the the coordination involved in managing agents through multi-step tasks. AWS’s latest version of Graviton was designed specifically to handle AI-related compute needs, the company says.

This deal brings more of Meta’s cash back to AWS instead of competitors like Google Cloud. Last August, Meta signed a six year, $10 billion deal with Google Cloud, though Meta had, until then, primarily been an AWS customer that also used Microsoft Azure.

We couldn’t help but notice that AWS timed the announcement of this deal right as the Google Cloud Next conference wrapped up, like a virtual smirk at its cloud rival. Google, of course, also makes its own custom AI chips and announced new versions of them at the show.

True, Amazon makes its own AI GPU as well: the Trainium, which, despite its name, is used for both training and inference — the stage that happens after a model is trained, when it’s actively processing prompts.

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

Ultimately, the Meta deal is allowing Amazon to showcase a huge AI customer as a proving point for its homegrown CPUs. These are chips that compete with Nvidia’s new Vera CPU, which is also ARM-based and designed to handle AI agentic 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 cloud service.

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