--- title: "Amazon's \"AI Chip Strategy\" Begins to Pay Off with $6 Billion Snowflake Deal" type: "News" locale: "en" url: "https://longbridge.com/en/news/287845235.md" description: "Amazon Web Services (AWS) has signed a five-year, $6 billion chip procurement agreement with cloud storage company Snowflake, making it a key customer for AWS Graviton processors. The deal drove Snowflake's stock price up by 35% and provided market support for Amazon's in-house chip strategy. As AI agents become more widespread, surging demand for CPUs has strengthened the market for Graviton chips, marking a deepening of the relationship between the two companies" datetime: "2026-05-28T01:59:15.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287845235.md) - [en](https://longbridge.com/en/news/287845235.md) - [zh-HK](https://longbridge.com/zh-HK/news/287845235.md) --- # Amazon's "AI Chip Strategy" Begins to Pay Off with $6 Billion Snowflake Deal Amazon's commercialization of its self-developed chips is accelerating. Cloud storage company Snowflake has signed a five-year, $6 billion chip procurement agreement with Amazon Web Services (AWS), becoming the latest major customer for AWS's Graviton processors. According to a Wednesday report by The Wall Street Journal, Snowflake will pay $6 billion over the next five years for access to Graviton CPUs within AWS data centers. Announced officially on Wednesday, this agreement places Snowflake among AWS's largest CPU computing customers, alongside Meta and Apple. The deal not only sent Snowflake's stock soaring by 35% in after-hours trading but also provided the latest market endorsement for Amazon's long-term strategy of betting on in-house chips. The rapid adoption of AI agents is currently reshaping the structure of computing power demand. AI agents that autonomously execute tasks require substantial CPU resources to coordinate and sequence computational tasks, driving a new wave of demand for central processing units. This trend directly benefits Amazon's Graviton chip business and validates Amazon's strategic positioning of Graviton as the "core computing power for the era of agent AI." ## Graviton Wins Major Client, Boosted by Wave of CPU Demand Launched by AWS in 2018, Graviton chips are central processing units designed for data center servers, covering a wide range of application scenarios from personal devices to advanced AI systems. As AI agent applications expand, the strategic importance of CPUs has significantly increased—agents need to schedule large numbers of processors to orchestrate and sequence computational tasks, which has kept demand for Graviton strong. **Snowflake was founded on the AWS platform in 2015 and has since deepened its partnership with Amazon. The company currently serves nearly 14,000 customers, including rewards and advertising startup Fetch and AI analytics platform Hex.** This $6 billion long-term commitment marks an upgrade in their relationship from platform dependency to deep computing power integration. This trend has also benefited other CPU suppliers. Recent stock price increases and sales growth at Intel, Advanced Micro Devices (AMD), and Arm Holdings are closely linked to the expansion of CPU demand driven by AI agents. ## Dual Strategy: In-House Chips and NVIDIA Coexist The closure of the large Snowflake deal is part of Amazon's broader chip strategy. Amazon's in-house chip business grew nearly 40% quarter-over-quarter in the first quarter of this year, with an annualized revenue scale exceeding $20 billion. Its Trainium AI training chips have secured over $225 billion in revenue commitments, primarily from leading AI labs such as Anthropic and OpenAI. Amazon stated that its "custom chip business" is now one of the top three data center chip businesses globally. At the same time, Amazon has not abandoned NVIDIA. CEO Andrew R. Jassy explicitly stated that **Amazon has no intention of giving up NVIDIA hardware and expects many enterprises to continue choosing NVIDIA chips, while another segment of customers may place greater value on the cost and performance advantages of Trainium. This dual-track strategy allows Amazon to reduce procurement costs and improve profit margins through in-house chips, while maintaining compatibility with the NVIDIA ecosystem and preserving flexibility in customer choices.** Notably, Amazon's capital expenditures in the first quarter reached $43.2 billion, driven mainly by investments in AWS and generative AI infrastructure. Amazon believes that data centers can operate for over 30 years, and the usage cycle for servers and chips typically lasts five to six years, meaning these investments will yield substantial long-term returns. ## Strong AWS Growth, AI Strategy Extends Beyond the Cloud The advancement of the chip strategy is injecting momentum into AWS's overall business. In the first quarter of this year, AWS revenue grew 28% year-over-year to $37.6 billion, reaching an annualized revenue scale of $150 billion. Customer spending on its Bedrock platform—which allows clients to call various foundation models to build AI applications—jumped 170% quarter-over-quarter, with the number of tokens processed in a single quarter exceeding the total of all previous years combined. Currently, OpenAI's models are also available to customers via Bedrock. Amazon's AI layout does not stop at cloud computing. The company has deeply integrated AI into multiple business segments, including warehouse automation, robotics, inventory forecasting, delivery optimization, advertising, customer recommendations, and supply chain management. Additionally, its autonomous driving business, Zoox, is about to collaborate with Uber, and its low-earth orbit satellite service is nearing commercial launch, having secured commitments from institutions such as Delta Air Lines, AT&T, Vodafone, and NASA, while partnering with Apple to provide satellite connectivity for iPhones and Apple Watches. In terms of financial performance, Amazon's total revenue in the first quarter grew 17% year-over-year to $181.5 billion, with adjusted earnings per share rising 75% to $2.80. Wall Street analysts expect Amazon's earnings to grow by approximately 21% in 2026 and another 14% in 2027. Among the 57 analysts covering Amazon, 49 rate it as a "Strong Buy," with an average stock price target of $315.67, implying an upside potential of about 16.6% from current levels. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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