During the third-quarter earnings call, Amazon.com, Inc. (NASDAQ:AMZN) CEO Andy Jassy underscored the company's dedication to its in-house silicon development, despite acknowledging a "deep partnership" with Nvidia Corporation (NASDAQ:NVDA).
What Happened: On Thursday, Jassy acknowledged that while Amazon has a strong partnership with Nvidia for GPUs, customers have expressed a need for better price performance for their AI workloads, especially as they scale up.
"While we have a deep partnership with Nvidia, we've also heard from customers that they want better price performance on their AI workloads," he said during his opening comments.
This has led Amazon to invest in its own custom silicon: Trainium for training and Inferentia for inference.
"The second version of Trainium, Trainium2 is starting to ramp up in the next few weeks and will be very compelling for customers on price performance," he stated.
The Amazon CEO also highlighted that Amazon Web Services experienced a 19.1% year-over-year growth, reaching an annualized run rate of $110 billion.
He cited customer deals with ANZ Banking Group, Booking.com, Capital One, Fast Retailing, Itaú Unibanco, National Australia Bank, Sony, T-Mobile, and Toyota as evidence of AWS's continued success.
"You can look at our partnership with Nvidia called Project Ceiba, where NVIDIA has chosen AWS's infrastructure for its R&D supercomputer due in part to AWS's leading operational performance and security," Jassy said.
Later while responding to a question, Jassy noted AWS's strong partnership with Nvidia saying, "We tend to be their lead partner on most of their new chips."
He added, "We were the first to offer H200s in EC2 instances. And I expect us to have a partnership for a very long time that matters."
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Why It Matters: Last month, Amazon inked a five-year deal with data and AI startup Databricks, which centered around Amazon's Trainium AI chips, offering a less expensive alternative to Nvidia Corp's popular GPUs.
Meanwhile, Amazon announced third-quarter net sales of $158.9 billion, reflecting an 11% increase compared to the previous year. This total surpassed the consensus estimate of $157.2 billion from analysts, according to data from Benzinga Pro.
The company reported third-quarter earnings per share of $1.43, exceeding the Street consensus estimate of $1.14.
Price Action: At the time of writing, Amazon shares surged 6.07% to $197.50 in after-hours trading, recovering from a 3.39% drop to $186.19 during the regular trading session.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
