Amazon has been developing its own AI chips to cut costs, which has also helped increase the profitability of Amazon Web Services (AWS). However, the e-commerce giant is struggling to develop AI chips that can compete with standard Nvidia chips.

Project migration issues, compatibility gaps and low usage are among the concerns slowing adoption of Amazon's AI chips. The situation has also put at risk the significant revenue Amazon generates from its cloud business. dent challenges Amazon faces with dent and sources familiar with the matter, as reported by Business Insider.

Amazon's in-house AI chips are facing a slowdown in adoption

Trainium and Inferentia are two of the best Amazon-designed chips that debuted towards the end of last year. Last year, Trainium's adoption rate among AWS customers was just 0.5% compared to Nvidia's GPUs, the publication reported.

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Amazon conducted the assessment to measure the rate of use of different AI chips through its AWS services in April 2024, according to the report. Meanwhile, Inferentia's adoption rate was slightly higher, at 2.7%.