In the process of transforming itself from an online bookstore into a cloud computing giant, Amazon.com Inc. became one of the world’s largest purchasers of the computer chips that power data centers. As its cloud business has expanded, the company has become increasingly fixated on designing its own chips instead of buying them. The shift could have potentially drastic implications for a critical aspect of the technology industry—and could prove threatening for traditional chipmakers such as Intel Corp. and Advanced Micro Devices Inc.
Amazon began signaling its intentions in 2015 when it acquired Annapurna Labs, a small Israeli
chip designer. It’s since become aggressive about developing chips specifically designed for Amazon Web Services’ own data centers. “This work is foundational—when we improve the hardware, everything that runs on it improves,” says Nafea Bshara, an Annapurna co-founder who’s now an AWS vice president. Annapurna’s staff has grown tenfold since the acquisition.Smugmug Inc., an online photo service that uses AWS to show billions of photos to its users daily, says it’s reduced its AWS costs by as much as 40% just by shifting to an AWS service that runs on Amazon’s in-house chip, branded Graviton. AWS mostly still relies on Intel chips, but Amazon charges Smugmug 20% less for services utilizing its own hardware, and Smugmug can buy less computing power because Amazon’s chips take 20% less time to run its tasks. “It results in a much lower bill for us without really having to do anything,” says Smugmug Chief Executive Officer Don MacAskill.
Microsoft Corp. and Alphabet Inc.’s Google are also
working on specialized chips. In part, the trend reflects how different the current crop of tech giants are from the data center operators of the past, which didn’t have the resources to pour hundreds of millions of dollars into designing their own chips.There’s also a technical shift under way, ushered in by the rise of smartphones. While Intel and AMD were making chips for data centers that prioritized speed, mobile devices required processors that used as little power as possible, so the things wouldn’t die before the end of the day. As the demand for these devices skyrocketed, there was immense incentive to improve the low-power chips, which began closing the gap in performance with the muscle-car models for data center business.
Energy efficiency has become
increasingly important. By 2025 data centers are expected to consume 15% of the world’s electricity, up from about 2% last year, according to Applied Materials, the biggest maker of chip manufacturing equipment. Keeping power consumption down is becoming more important than the cost of the chips themselves for the data center owners.The technology underlying low-power smartphone chips is made by Arm Ltd., a British semiconductor company that licenses it but doesn’t make chips itself. Amazon and Microsoft use Arm as the basis for their internal chip designs. The Graviton chips were initially used only in specialized cases but have developed into arguably the first Arm-based chips to be a credible competitor to Intel’s general-use data center offerings. “It’s a renaissance in semiconductors,” says Jon Bathgate, an investor at Colorado-based investment firm NZS Capital.
As Amazon, Google, and Microsoft compete for cloud computing customers, the specific virtues of their chips may become a selling point, says Smugmug’s MacAskill. “It’s going to get pretty interesting when these cloud providers begin to differentiate themselves even further.”
None of these companies manufacture the new chips they design; they rely on the same international supply chain that’s been showing strain during the coronavirus pandemic. If such a crunch continues, it will slow their progress and eat into profits.
Then there’s the pending acquisition of Arm by Nvidia Corp., itself a designer of chips used in some data centers. Nvidia has promised to maintain open access to Arm’s technology and says it has no incentive to do otherwise. Some of Arm’s customers have already expressed concerns to regulators considering whether to approve the deal. These complaints are private, but Bloomberg News has reported that Google, Microsoft, and Qualcomm are among the companies that have made them.
The surge in custom-made chips could further reduce the cost of advanced computing products and spark innovations, which would be good for everyone. Or almost everyone. To stay ahead of the newcomers, Intel has been
buying startups that make AI-specific chips while it dedicates massive resources to improving the efficiency of its cloud computing products and offers to design custom builds for its biggest customers. But NZS’s Bathgate thinks it will struggle to stay ahead. “This is an existential problem for Intel,” he says.
Read next: If Tesla Is the Apple of Electric Vehicles, Volkswagen Is Betting It Can Be Samsung
"chips" - Google News
March 17, 2021 at 05:00PM
https://ift.tt/3rWBmCh
Why Amazon, Google, and Microsoft Are Designing Their Own Chips - Bloomberg
"chips" - Google News
https://ift.tt/2RGyUAH
https://ift.tt/3feFffJ
Bagikan Berita Ini
0 Response to "Why Amazon, Google, and Microsoft Are Designing Their Own Chips - Bloomberg"
Post a Comment