Why AWS has Tapped Intel for Custom AI Fabric Chips

Amazon Web Services (AWS) has announced a multi-year, multi-billion-dollar partnership with Intel to develop custom AI chips, aimed at accelerating the performance of AI applications and strengthening the domestic AI supply chain in the United States.

The deal comes at a crucial time for the semiconductor industry, which has been grappling with supply chain disruptions, geopolitical tensions and increased demand for advanced chips capable of handling complex AI workloads. The latest step in its 18-year partnership with Intel, AWS is positioning itself to secure a reliable supply of cutting-edge processors tailored to its specific needs.

Under the terms of the agreement, Intel will produce an AI fabric chip for AWS using its most advanced process node, Intel 18A. This process is expected to deliver significant improvements in performance and energy efficiency, critical factors in the competitive cloud computing market. Additionally, the companies say that Intel will manufacture a custom Xeon 6 chip for AWS on its Intel 3 process, further enhancing the cloud provider's computing capabilities.

Combining Intel’s semiconductor experience with AWS’s cloud infrastructure

The collaboration between AWS and Intel intends to combine Intel’s semiconductor design and manufacturing expertise with AWS’s cloud infrastructure and AI services. “At AWS, we're committed to delivering the most powerful and innovative cloud infrastructure to our customers,” says Matt Garman, CEO of AWS. “By co-developing next-generation AI fabric chips on Intel 18A, we continue our long-standing collaboration, dating back to 2006 when we launched the first Amazon EC2 instance featuring their chips.” 

Beyond technological advancement, the move also has significant implications for the US semiconductor industry. Both companies have expressed their commitment to bolstering domestic chip manufacturing, with a particular focus on the state of Ohio. Intel has reaffirmed its plans to build leading-edge semiconductor manufacturing facilities in the New Albany area, while AWS has pledged to invest US$7.8bn to expand its data centre operations in Central Ohio.

The choice of Ohio as a hub for this collaboration is no coincidence. The state has been actively courting high-tech investments and this partnership between AWS and Intel serves as a testament to its growing importance in the US technology landscape.

The semiconductor industry has been under intense scrutiny in recent years, with policymakers and business leaders alike recognising the strategic importance of domestic chip production. The global chip shortage that began in 2020 exposed vulnerabilities in the supply chain, prompting calls for increased investment in US-based manufacturing. This partnership between AWS and Intel aligns with these goals, potentially serving as a model for future collaborations in the sector.

Growing AI and ML workloads in cloud computing

For AWS, the decision to partner with Intel on custom AI chips reflects the increasing importance of AI and machine learning workloads in cloud computing. As more businesses turn to AI to drive innovation and efficiency, cloud providers are under pressure to offer high-performance, cost-effective solutions. By working closely with Intel to develop bespoke chips, AWS aims to differentiate its offerings in an increasingly competitive market.

And while traditional chip manufacturers like Intel have faced challenges from specialised AI chip designers, the partnership between the two companies demonstrates that established players can leverage their manufacturing expertise and scale to stay ahead in the AI era.

“This expansion of our longtime relationship with AWS reflects the strength of our process technology and delivers differentiated solutions for customer workloads,” comments Pat Gelsinger, Intel CEO. “Intel’s chip design and manufacturing capabilities, combined with the comprehensive and broadly adopted cloud, AI and machine learning services of AWS, will unleash innovation across our shared ecosystem and support the growth of both businesses, as well as a sustainable domestic AI supply chain.” 

Looking ahead, the two companies have signalled their intention to explore further collaborations, potentially leveraging Intel's future process nodes, including Intel 18AP and Intel 14A. These advanced manufacturing technologies are expected to play a crucial role in the development of next-generation AI processors, potentially offering significant performance gains and energy efficiency improvements.

As Matt Garman concludes: “Our continued collaboration allows us to empower our joint customers with the ability to run any workload and unlock new AI capabilities.”

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