Nvidia $NVDA ( ▲ 3.74% ) trimmed gains after Amazon $AMZN ( ▲ 0.87% ) introduced its newest custom AI chip, Trainium3, at AWS re:Invent. Amazon says the chip can cut AI training and inference costs by up to 50% compared to GPU-based systems built by Nvidia and AMD $AMD ( ▲ 6.87% ) , adding fresh competitive pressure to the dominant GPU maker.
The launch comes as Nvidia already faces concerns over custom silicon from Big Tech. Google $GOOGL ( ▲ 0.72% ) is reportedly exploring selling its TPUs, codesigned with Broadcom $AVGO ( ▲ 1.98% ) , to Meta $META ( ▲ 0.32% ) . Traders worry this could send more AI workloads toward in-house chips and away from traditional GPUs. Nvidia entered the week trading at a record valuation discount to Broadcom as the market prices in a long-term shift in AI chip share.
Even with the new competition, Amazon emphasized that Nvidia remains central to the future of AI compute. The company said its next Trainium4 chip will support Nvidia NVLink Fusion interconnect technology. That signals a world where Amazon’s custom hardware is used alongside Nvidia’s chips rather than replacing them.