Cloud knowledge storage large Snowflake has signed a brand new $6 billion five-year settlement with Amazon Net Companies, the businesses introduced on Wednesday.
Snowflake has all the time run on AWS, although clearly, as of late, it is usually accessible on Microsoft Azure and Google Cloud. For comparability on simply how large this deal is for these corporations, Snowflake has bought $7 billion price of its companies by way of AWS Market whole because it was based in 2012, AWS says. So this new contract is near all the cash it has ever introduced in from that cloud.
It might try this as a result of Snowflake’s clients are accelerating their spending on AWS as of late, Snowflake says, doubling in 2025 to $2 billion for that calendar yr alone.
What’s driving the expansion is, naturally, AI. Snowflake has been providing its AI constructing instrument, Cortex AI, for a few years now. It’s a instrument that is sensible: Snowflake is the place a lot of an enterprise’s knowledge lives. The AI instrument can present options like a textual content interface for database queries (simply ask, in common language), abstract experiences, and so forth.
Of explicit notice is that Snowflake is signing this contract for extra entry to AWS’s home-grown ARM-based CPU chip, Graviton.
As AI strikes from coaching to each day utilization to automation by way of brokers, CPU utilization skyrockets. Whereas GPUs deal with coaching and reasoning, CPUs deal with many of the remainder of the duties related to AI, significantly brokers.
Amazon CEO Andy Jassy final month boasted that Amazon’s personal homegrown AI chips supply “higher price-performance” than Nvidia’s choices, although AWS nonetheless makes use of Nvidia’s chips in its cloud. Demand is so excessive for AI processing that cloud suppliers like AWS are deploying chips as quick as they’ll. On prime of that, the entire main AI mannequin makers (and plenty of different AI choices) have architected their apps particularly for Nvidia’s chips.
Nonetheless, Amazon’s personal chips are a extra inexpensive choice for the cloud large to deploy. Amazon, ever the price-conscious firm, says it passes these financial savings alongside to its clients.
Consequently, these chips are luring in new multi-billion-dollar offers. Final month, for example, AWS signed a deal to offer tens of millions of Graviton chips to Meta for its rising AI compute wants. That was an enormous win for AWS as a result of Meta had signed a $10 billion take care of Google Cloud a number of months earlier.
Greater than that, these offers are serving as discover to Nvidia that aggressive CPUs from the cloud giants are trying to return for its lunch. Google has additionally been making its personal AI chips for years. Microsoft simply launched its Maia AI chip in January.
Not surprisingly, Nvidia CEO Jensen Huang stated final week that he’s greater than able to defend, and even develop, his turf. The brand new AI-specific CPU his firm launched, referred to as Vera, represents a ‘model new” $200 billion marketplace for Nvidia, he proclaimed after delivering one other record-breaking quarter final week. And he’s already bought $20 billion price, he stated.
Whereas Nvidia might not be giving up market share to Amazon or any cloud supplier that simply, AWS’s multi-billion-dollar cloud offers present how AI is lifting its boat. Whichever corporations profit most from the rise of AI in our work and residential lives, the cloud suppliers are getting their share.
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