AWS works on major deal to provide IBM with Nvidia GPUs for AI: report

Amazon Web Services (NASDAQ:AMZN) is reportedly working on a nearly half-a-billion-dollar deal to secure Nvidia (NASDAQ:NVDA) processors via the cloud for IBM’s (NYSE:IBM) artificial intelligence training, according to Business Insider.

The deal, valued at $475M over five years, would provide IBM access to AWS’s EC2 servers equipped with Nvidia’s GPUs, the report said, citing an internal Amazon document. The agreement would expand IBM’s use of EC2 servers to train AI models.

The alleged deal highlights the surging demand for Nvidia’s GPUs as well as the potential windfall for hyperscalers such as AWS, who has invested heavily in expanding data centers.

Earlier this year, IBM announced a plan to integrate its watsonx AI and data platform with Amazon Sagemaker.

“Our collaboration with IBM will bring even more generative AI solutions to our mutual customers,” said Ankur Mehrotra, general manager of Amazon SageMaker at AWS.

Amazon has also developed its own AI chips such as Trainium and Inferentia. Last month, Amazon signed a deal with Databricks to allow the data warehouse company to use Amazon’s Trainium AI chips. This was also a five-year deal.

AWS continues to show colossal growth. During the third quarter of 2024, it generated $27.45B in revenue, which was a year-over-year increase of 19%.