Amazon announced Tuesday that Uber will expand its agreement with AWS cloud services to run more ride-sharing functions on Amazon chips. Uber will specifically expand its use of AWS’s Graviton, a low-power, ARM-based server CPU, and begin new trial testing of AWS’s Nvidia rival AI chip, Trainium3.
This deal is less of a long-term threat to Nvidia and more of an outright rebuke by Amazon against AWS’s cloud competitors, Google and Oracle.
Uber has historically operated its own data centers, but in 2023 the ride-hailing company famously signed a huge multi-year cloud computing deal with Oracle and Google. The idea is to move most of the IT infrastructure from its own data centers to these two clouds.
In December, Uber publicly reiterated its goal in a blog post:
In February 2023, Uber began migrating from its on-premises datacenter to the cloud using OCI and Google Cloud Platform to address the dual challenges of migrating large workloads and deploying Arm-powered compute instances into previously x86-dominated environments.
In its post, Uber specifically highlighted the use of Ampere’s ARM chips in Oracle’s cloud. Here’s where things get interesting.
If you want a crash course in how intertwined Silicon Valley is, look no further than Ampere’s history.
Ampere was founded by former Intel tycoon Renee James after she was not promoted to CEO of the chipmaker. She pulled out all the stops to raise money to start the company, including her then-job as an investor with private equity firm Carlyle and a seat on Oracle’s board of directors. Oracle owns about a third of the company, and James had to give up his position as an independent director of Oracle to make the investment.
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(Incidentally, James was a key board member who helped vote on Oracle’s $9.3 billion acquisition of NetSuite, of which Larry Ellison was a majority shareholder, in 2016. That deal led to the loss of a shareholder lawsuit that alleged Oracle overpaid.)
In December, Ampere’s main competitor SoftBank acquired Ampere, and Oracle sold its stake for a hefty $2.7 billion pre-tax profit. Mr. James will retire from Oracle’s board at the end of 2024 and no longer works for Ampere.
Oracle is raising money as soon as possible to build OpenAI and Stargate data centers. Ellison said Oracle sold Ampere because it believed designing data center chips in-house was no longer a competitive advantage. The company likes to buy chips and has a big deal with Nvidia.
It is worth noting that Oracle, SoftBank, and Nvidia are also part of OpenAI’s circular deal, which is supposed to fund the model maker’s large-scale data center construction.
But now AWS has announced that it has won a bigger contract from Uber, one of Oracle’s major customers, because of its chip design.
Uber joins Anthropic, OpenAI, and Apple as big tech companies that have signed on to or increased their usage of AWS thanks to these AI chips. Amazon CEO Andy Jassy said in December that Trainium is already a multibillion-dollar business.
(To learn more about the teams and labs that design these chips, take an exclusive tour of our facility.)
