Amazon Web Services Reportedly Offers IBM Nvidia GPUs for AI in $475 Million Deal

Amazon Web Services ( AMZN , Financials ) Amazon Web Services is reportedly finalizing a $475 million deal to provide IBM ( IBM , Financials ) and Nvidia ( NVDA , Financials ) processors over the cloud for artificial intelligence applications, reports Business Insider.

The five-year deal will give IBM access to AWS's EC2 servers, which have Nvidia GPUs, thus allowing IBM to improve its AI model training capacity. An internal Amazon document cited in a Business Insider report details IBM's increased use of EC2 for artificial intelligence research.

This partnership emphasizes the strategic orientation of hyperscale providers such as AWS, which is highly dedicated to building data center capacity, and the growing demand for Nvidia GPUs.

IBM revealed earlier this year plans to integrate Amazon SageMaker with its WatsonX artificial intelligence and analytics platform. Our collaboration with IBM will bring productive AI solutions to our joint customers, said Ankur Mehrotra, general manager of Amazon SageMaker at AWS.

AWS also unveiled its artificial intelligence processors called Trainium and Inferentia. Last month in an unrelated development, AWS secured a five-year contract with Databricks that allows the data business to use Amazon's Trainium processors.

AWS continues to grow rapidly; in Q3 2024, it earned $27.45 billion, a 19% increase over last year.

Separately, Amazon is experimenting with new models in the food industry to combine Whole Foods Market and Amazon Fresh stores into a single delivery system. Currently dominated by physical stores, this approach seeks to increase Amazon's dominance in the US food sector of 1.5 billion dollars.

Smart glasses designed to help delivery workers by providing directional guidance and hands-free package handling are being developed by Amazon. Codenamed “Amelia,” the project is in the testing phase to address issues such as data collection and battery life.

Using autonomous robots such as Proteus, which negotiate facilities independently, and AI products including Rufus, a retail assistant, and the Vapr system for delivery drivers, the company is also improving its warehouse operations. These developments seek to increase delivery speed and efficiency.

This article first appeared on GuruFocus.