The world’s largest semiconductor companies are facing a growing competitive threat: their largest customers are customizing their own chips for the supercharged areas of cloud computing and artificial intelligence.
Chip making has long been ruled by major manufacturers and design houses such as Intel Corp., Advanced Micro Devices Inc. and graphics chip maker Nvidia Corp. Now Amazon.com Inc., Microsoft Corp. and Google in the game chasing better performance and lower costs, shifting the balance of power in the industry and pushing traditional chip makers to respond by building more specialized chips for major customers.
Amazon unveiled a new chip this month that, it says, promises to speed up the way algorithms using artificial intelligence learn from data. The company has already designed other processors for its cloud computing arm called Amazon Web Services, including the brains of computers known as central processing units.
The pandemic has accelerated the rise of cloud computing as businesses have broadly embraced the kind of digital tools that these remote servers use. Amazon, Microsoft, Google and others have experienced strong growth in the cloud during the remote working period.
Business customers are also showing an increasing need to analyze the data they collect about their products and customers, fueling the demand for artificial intelligence tools to understand all that information.