New at Amazon: Its Own Chips for Cloud Computing

Big software companies don’t just stick to software any more—they build computer chips. The latest proof comes from Amazon, which announced late Monday that its cloud computing division has created its own chips to power customers’ websites and other services. Amazon’s surprise move echoes Google’s effort to create its own chips to power artificial intelligence algorithms running in its data centers, which it also rents out to cloud customers. That’s not possible with off-the-shelf chips from Intel or AMD, which are designed to satisfy many different customers, says Matt Garman, a vice president involved with Amazon’s project. Garman says some customers have seen savings of 45 percent by switching to the new servers from existing Amazon offerings powered by conventional chips.