Amazon (AMZN) stock gained Tuesday after the tech giant announced updates to its Trainium AI-focused chip and plans for an AI supercomputer using a custom-designed server. The news underscored how Amazon is stepping up its efforts to challenge Nvidia’s dominance in AI chips.

Amazon Web Services, the company’s cloud-computing arm, announced at its annual re:Invent conference that its Trainium2 AI chips are generally available. Amazon also unveiled a new “Ultraserver” designed to connect 64 of its Trainium chips. Working with AI startup Anthropic, Amazon plans to build an “Ultracluster” of those servers in a single data center that will be among the world’s largest for training AI models.





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The first customer for the Ultracluster will be Anthropic, an AI developer in which Amazon has invested $8 billion. But AWS Chief Executive Matt Garman said during a speech Tuesday that a list of companies including Apple (AAPL), Adobe (ADBE) and Databricks are using Amazon’s Trainium2 chip.

“It’s fantastic to see how some of the most innovative companies anywhere in the world are leaning in, leaning into Trainium2 for their cutting-edge AI efforts,” Garman said on stage in Las Vegas. AWS is hosting its annual re:Invent customer conference this week.

On the stock market today, Amazon stock is up more than 1% at 212.96 in recent action.

Amazon’s Next AI Chip In 2025

Garman also said a more powerful Trainium3 chip will be available in late 2025.

The announcements highlight Amazon’s position as both a customer and competitor to Nvidia. Nvidia dominates the market for the graphics processing units that power AI models. Amazon wants enterprises to use its cloud services for their AI needs, and therefore buys lots of Nvidia chips that it rents out.

But Amazon, the largest cloud provider by market share, has been working to offer its own custom chips at a lower cost. Garman said during his speech that Trainium2 offers “30% to 40% better price performance than current GPU-powered instances.”

Garman offered a more direct challenge to Nvidia during an interview with the Wall Street Journal published Tuesday.

“Today, there’s really only one choice on the GPU side, and it’s just Nvidia,” Garman told the news outlet. “We think that customers would appreciate having multiple choices.”

Amazon Stock: AI Push

The announcement comes as Amazon plans to spend more than $100 billion to build AI-capable data centers over the next decade, a big bet that AI will drive future cloud spending. It is competing against Microsoft (MSFT), Google (GOOGL) and others for that business.

Garman said the series of announcement from the Re:Invent conference are part of an effort to allow customers to “build bigger, faster, more exciting Gen AI applications.”

Nvidia stock was up a fraction Tuesday. Dell Technologies (DELL) stock fell 1%. Dell is a leading provider of AI servers for data centers.

Amazon Stock Up 40% This Year

Amazon stock has gained more than 40% year to date. That includes a 5.5% gain last week.

Amazon stock last Tuesday retook a former 201.20 consolidation-pattern buy point, according to IBD MarketSurge.

The stock is now just above a 5% buy zone from the 201.20 entry, MarketSurge shows. Shares first broke out past that level on Nov. 6 as part of a broader rally following the election of Donald Trump to a second presidential term.

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