Intel Partners with Amazon AWS for Multi-Billion-Dollar AI Chip Manufacturing Deal

Source: WCCFTECH

By Priya Khosla September 19, 2024

In a major development for the semiconductor and AI industries, Intel and Amazon Web Services (AWS) have announced a multi-billion-dollar partnership to produce AI chips utilizing Intel's cutting-edge 18A process node technology. This deal, part of Intel's broader efforts to regain its position in the chip manufacturing space, will see the two tech giants collaborate on custom chip development to support Amazon's cloud computing and AI workloads. Intel's shares surged by 8% following the announcement, marking a positive shift for the chipmaker, which has faced challenges in recent years.

The partnership will focus initially on Intel producing a custom Xeon 6 chip for AWS, leveraging its Intel 3 manufacturing process. This new chip is expected to provide a significant performance boost for Amazon’s EC2 cloud instances, which have historically benefited from up to 20% performance improvements through previous Xeon processors. In addition, Intel will develop an "AI fabric chip" for AWS using its forthcoming 18A process, which is expected to be on par with Taiwan Semiconductor Manufacturing Company's (TSMC) 2-nanometer technology, marking a major leap in AI chip capabilities.

This collaboration is part of a broader trend among tech giants like Amazon, Google, and Meta, which are increasingly developing in-house AI chips to power their cloud computing and AI services. While NVIDIA remains the dominant force in the AI processor market, Intel's partnership with AWS signals its determination to become a major player in the AI semiconductor space, with CEO Pat Gelsinger stating the company’s goal of becoming the largest system foundry for the AI era by 2030. As competition heats up, this partnership could position Intel as a key competitor in the race for AI dominance.