AWS invests $1 billion in custom chips to boost enterprise apps

AWS is making a major push in its custom chip business with a $1 billion deal with Synopsys, a longtime partner. The primary beneficiaries of this investment will be enterprise software vendors like SAP, Salesforce, and Workday, as the new chips are designed to optimize the performance of their applications running on AWS.

AWS senior vice president Peter DeSantis highlighted that purpose-built chips, such as Graviton and Trainium, deliver better performance at lower costs because they are tailored to customer needs. He noted that Synopsys helps AWS accelerate its chip design process, enabling more efficient computing solutions for global customers.

Synopsys CEO Sassine Ghazi emphasized that special-purpose silicon is central to AWS's innovation. He expressed pride in partnering with Amazon for the next phase of growth in application-optimized IP solutions. This collaboration is expected to supercharge enterprise apps, providing enhanced performance for business customers using AWS.

The deal is part of AWS's strategy to reclaim its position among the top hyperscalers, competing with Google Cloud, Oracle, and Microsoft. It also underscores AWS's rapid growth in the chip business, which achieved a $25 billion annualized run rate just three months ago, growing at over 100%. This move is likely to prompt other hyperscalers to develop similar solutions for their ISV partners.