It was a busy week for the darling semiconductor Nvidia (Nasdaq: NVDA). The company organized its annual GTC summit, presenting to the most recent and the best investors in terms of product innovation, customer testimonies, etc.
In the midst of all Hoopla, E -commerce and Cloud computing geomots Amazon (Nasdaq: Amzn) tried to take a blow to Nvidia.
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Below, I will detail some interesting developments from Amazon and will explore if the member of the “Magnifiment Seven” has just moved his companion against Nvidia.
What has I have just done?
Amazon’s Cloud Division – Amazon Web Services (AWS) – is a fairly sophisticated operation. AWS develops a multitude of different platforms and even has a large infrastructure component for the company, including personalized data centers and chipsets.
For many of the last two years, Nvidia has not faced a major competitive threat to graphic processing units in the data center (GPU). This dynamic provided unprecedented Nvidia pricing.
But according to a new report of InformationAWS seeks to cause a sensation in the chip by rivaling with Nvidia on the price. According to the report, AWS claims that its trainium chipsets operate equally with the H100 of Nvidia (called Hopper) but seeks to sell them for 25% of what Nvidia sells its GPUs.
Image source: NVIDIA.
Price pressure was going to be a factor at some point
On the surface, the sale of a product as good as the dominant current but at a considerably reduced pace resembles a unwanted headwind for Nvidia. However, there are a few finest details that I would like to explore more.
One of the disadvantages of unprecedented demand can be found in the supply chain. Over the past two years, NVIDIA has had to invest significant efforts and capital in the supply chain logistics to try to mitigate the bottlenecks of its backlog. Considering the demand for the company’s tokens does not seem to vanish, many of its own customers, in particular Microsoft,, Meta-platformsAnd Alphabet All said that they are developing their own personalized silicon solutions in order to reduce such dependence to Nvidia.
In addition to that, Advanced micro-apparents Silently emerged as a rapidly growing alternative to NVIDIA data center in the past year. The company attracted Microsoft, Meta, and Oracle As customers, completing their NVIDIA infrastructure with the new AMD MI300 accelerators.
In general, when new products are starting to enter the market, inheritance suppliers tend to be forced to modify their price strategies in order to remain competitive. With personalized silicon solutions of cloud hyperscales, as well as alternative AMD chipsets on the rise, I think it was only a matter of time before Nvidia was subject to pricing.
Even with growing competition, I think Nvidia can have a solution to bypass Amazon’s pricing strategy. During the GTC conference, the CEO of Nvidia, Jensen Huang, jokingly called the “main income Destroyer “speaking of the hopper chip.
Why would he do that? Well, Huang continued saying “There are circumstances where Hopper is fine. This is the best thing I can say about Hopper. There are circumstances where you are well.”
Essentially, Huang says more or less that the development of AI evolves at such a rapid pace that chipsets which were once considered as the standard of the industry are already demoted. Fortunately for Nvidia, this is not a problem. The new generation architecture of the company, nicknamed Blackwellgenerated $ 11 billion in sales during the fourth quarter and the demand for new fleas remains heaven.
My last catch
In a way, I consider Huang to talk about GPU Hopper as a smart way to sell Blackwell fleas and to market how powerful these new products are. Going further, Huang spent a lot of time at GTC to talk to investors of the Blackwell successor product, Rubin architecture.
The idea that I really want to go home here is that Nvidia innovates at an amazing pace, so I don’t see Amazon’s Trainium Chips like a headwind for Nvidia. Although it is likely that some companies will be satisfied with a less sophisticated architecture at a more effective price, I do not consider Amazon’s pricing strategy as a long -term stroke of control.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Adam Spatacco At positions in Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool has positions and recommends micro advanced devices, alphabet, Amazon, Meta Platforms, Microsoft, Nvidia and Oracle. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.
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