SEATTLE — The Wall Street Journal reported on Tuesday that eCommerce behemoth Amazon (AMZN, Financials) has struck a five-year agreement with Databricks, a key Snowflake (SNOW, Financials) rival, to effectively set up a data warehouse startup to utilize Amazon's Trainium AI processors. Though the specifics weren't revealed, the deal will likely assist businesses in developing AI in cost-cutting efforts.
Moreover, Databricks president Naveen Rao highlighted how the partnership will allow companies to build AI models significantly quicker and more inexpensively effectively. This is primarily because of the savings from utilizing Amazon's Trainium processors instead of those from Nvidia (NVDA, Financials), which spearheads the AI chip space.
Also, it's noteworthy that Databricks will continue using Nvidia processors as part of a pre-existing agreement with Amazon Web Services (AWS), notwithstanding the change. Along with its Inferentia series of AI chips used to develop and operate AI models, Amazon debuted the second iteration of its Trainium chips in November last year. All in all the agreement adds to Amazon's position in the cutthroat AI chip space, as it looks to advance its position further.
