Amazon and Databricks Forge Five-Year Partnership to Revolutionize AI Development Costs

Amazon Strikes at Nvidia's Stronghold Through Databricks Deal, Cutting AI Costs by 40% - Amazon.com (NASDAQ:AMZN)

Databricks aims to reduce costs for customers, challenging Nvidia's dominance in AI chip technology. Amazon.com Inc AMZN inked a five-year deal with data and AI startup Databricks to provide businesses with cost-effective AI-building capabilities. The financial terms of the contract remain undisclosed. The partnership centers around Amazon's Trainium AI chips, which offer a less expensive alternative to Nvidia Corp's NVDA popular GPUs for companies looking to customize or build their AI models. Also Read: Amazon and Oracle Partnership Unlocks Major Cloud Growth Opportunity, Analyst Suggests Databricks proposed to pass on the savings from using Amazon's chips to customers to break into Nvidia's moat. Databricks customers include W.W. Grainger, Inc GWW and the car-shopping site Edmunds.com. Both companies are eying the enterprise AI space intensifying rivalry with Microsoft Corp MSFT and Snowflake Inc SNOW. Databricks, valued at $43 billion as of 2023, is already deeply involved in the AI market, having acquired AI startup MosaicML for $1.3 billion. Databricks' existing partnership with Amazon allows customers to access its data services through Amazon Web Services (AWS). As part of the agreement, Databricks will also increase its use of Nvidia GPUs rented through AWS. According to Naveen Rao of Databricks, AWS has generated more than $1 billion in revenue for Databricks and remains the company's fastest-growing cloud partner. Rao of Databricks told the WSJ that the collaboration with Amazon allows Databricks to pass cost savings to customers by leveraging Amazon's AI chips. Dave Brown of Amazon Web Services told the WSJ that Amazon's Trainium chips, specifically designed for AI tasks, can help businesses cut their AI development costs by up to 40%. Amazon stock is up over 41% in the last 12 months. Nvidia is up 195% thanks to the AI wave. JMP Securities analyst Nicholas Jones expects Amazon AWS to outpace Microsoft Azure, citing the latter's softness in some European geographies and capacity constraints. Scotiabank's Nat Schindler and JP Morgan's Doug Anmuth flagged AWS AI's focus on providing flexible, cost-effective AI solutions, positioning it as a critical partner for companies leveraging AI. Price Actions: AMZN stock is down 1.34% to $185.52 at the last check on Tuesday. Also Read: Amazon's Profitable Essential Merchandise, Efficiency Gains Set To Drive Growth: Analyst Photo via Company This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

AWs and Databricks to deliver more affordable generative AI for joint customers - SiliconANGLE

AWs and Databricks to deliver more affordable generative AI for joint customers Amazon Web Services Inc. and Databricks Inc. say they have signed a five-year deal to help companies cut costs when building and running their artificial intelligence applications. As part of the deal, Databricks says it will use AWS's Trainium AI chips to power its Mosaic AI service, which helps businesses to customize existing large language models or build their own from scratch. Amazon says the main benefit for customers is that they'll pay a lot less to use its chips, as opposed to Nvidia Corp's graphics processing units, which are the most popular hardware for AI workloads today. Databricks' AI service stems from its $1.3 billion acquisition of a company called MosaicML Inc. last year. The Mosaic AI service includes tools for model serving, which support a variety of third-party LLMs, including a selection of models available through Amazon Bedrock. The companies explained that Databricks' customers will be able to scale model training on Mosaic AI at lower costs when using the AWS Trainium chips. In addition, they'll provide other capabilities to help their joint customers build, deploy and monitor custom AI applications, without sacrificing control over their data or intellectual property. In addition, the deal will see Databricks and AWS work together to make it easier for customers to run Databricks' big data services on AWS via new integrations on the AWS Marketplace, including simplified onboarding, configuration and serverless compute from AWS. Databricks said it will work with its system integration partners to create additional technical solutions and implementation resources designed to help customers identify generative AI use cases and on-premises workloads that can be optimized with Databricks on AWS. According to Databricks, the partnership intends to make it faster and cheaper for businesses to design and build AI applications, primarily from the savings derived from using Amazon's AI chips. "Strengthening our collaboration with AWS allows us to provide customers with unmatched scale and price-performance so they can bring their own generative AI applications to market more rapidly," said Databricks co-founder and Chief Executive Ali Ghodsi. The deal should help both companies in their efforts to compete with rivals such as Microsoft Corp., Snowflake Inc. and Salesforce Inc., which are all vying with them to court businesses' AI dollars. The most successful AI initiatives tend to be those that rely on businesses' internal data to customize AI applications. For instance, a company might create a bespoke AI chatbot that's fueled with knowledge from its internal databases. Amazon's strategy is to position itself as a neutral provider of AI technology, providing customers with access with a variety of AI models and the infrastructure to run them. AWS CEO Matt Garman said the collaboration with Databricks will enable companies to build AI applications powered by valuable insights from their own data. "We're helping customers innovate faster by focusing on what truly matters most for their business," he said. Databricks' derives its revenue from its data analytics services, AI tools and other software that can tap into AI-ready data, helping companies to build various kinds of AI applications. The two companies have an existing partnership, where customers can run Databricks' data tools and services on AWS.