AI competition is weird. But this goes deeper than "Which LLM is best??" or companies on the left trying back the winning horse. Behind the scenes is a cloud war and a chip war - that's where the money is. Let’s take a look:
1. This is a cloud war.
Let’s take Anthropic, for example. They’re committing to use AWS as its primary cloud provider. That could translate into billions in revenue for AWS as Anthropic scales up.
By investing in Anthropic and its large language model Claude, Amazon is positioning itself to reap the benefits of the growing AI market.
As Claude gains popularity and drives more businesses to adopt AI solutions, it funnels money back to Amazon through increased usage of AWS services.
This strategic investment not only strengthens Amazon's position in the AI space but also creates a virtuous cycle of growth for its cloud business.
Guys - everyone is doing this. Investing huge amounts and getting it back in cloud services. That should command our attention.
The war between MS Azure, Google Cloud and AWS is worth billions and it’s only going to get bigger.
2. This is a chip war.
Chips are everything - they’re the engines. And up till now Nvidia has ruled the world.
But let’s just look at the last few weeks:
Nvidia:
The company announced the H200 GPU on November 13. This new chip is designed for AI work and upgrades the H100 with 1.4x more memory bandwidth and 1.8x more memory capacity. The first H200 chips are expected to be released in the 2nd quarter of 2024.
Microsoft:
Microsoft unveiled the Maia 100 artificial intelligence chip on November 15. The chip is designed for AI tasks and generative AI. The company hasn’t provided a specific timeline for the release of the Maia 100, but it is expected to arrive in early 2024
Amazon:
Amazon Web Services (AWS) announced the next generation of two AWS-designed chip families—AWS Graviton4 and AWS Trainium2—on November 28. These chips are designed for a broad range of customer workloads, including ML and AI applications - that was at their big show in Vegas.
And Google has jumped in to this race as well.
So what's happening in this graphic?
These investments are hedges.
They're land grabs for cloud services
They're trying to get their chips to be the dominant chips.
Gonna be an interesting year ahead.
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