Intel Signs Multi-Billion-Dollar Deal to Develop Amazon AI Chips Using Latest 18A Technology

After an agreement with Amazon AWS to build chips using Intel's 18A process node, shares of the company were up on much-needed good news by some 8% in after-hours trading.…

By Ishika Setia

September 17, 2024

2 min read

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After an agreement with Amazon AWS to build chips using Intel’s 18A process node, shares of the company were up on much-needed good news by some 8% in after-hours trading. It is the latest in Intel’s expanding Intel Foundry Services business, pushed by CEO Pat Gelsinger in a bid to rejuvenate the faltering chipmaker.

Intel To Develop Amazon AI Chips

At the time, officials in Ohio supported the deal and Amazon said it would invest $7.8 billion in data center operations there. The partnership will further explore beyond these horizons with future chip schemes like Intel’s 18AP and 14A processes, too. Terms were not disclosed beyond the fact that Intel and Amazon said they had agreed to a “multi-year, multi-billion-dollar framework” which included co-investment in products and wafers. They also highlighted their history of collaborating on Amazon’s cloud computing services powered by Intel chips.

Amazon Web Services (AWS), the profitable cloud division of Amazon, has historically developed custom chips for its software, primarily based on Arm architecture. As part of this new agreement, Intel will use its Intel 3 manufacturing process to build a custom Xeon 6 chip optimized for Amazon’s workloads. These processors have previously enabled Amazon’s EC2 instances to deliver up to 20% better performance. Intel will also build an “AI fabric chip” on its upcoming 18A process, the company’s bid to retake manufacturing technology leadership from Taiwan Semiconductor Manufacturing Company (TSMC), which recently announced plans for a 2-nanometer node.

Speculation suggests the AI fabric chip could be based on Arm architecture, succeeding Amazon’s current processors. Intel CEO Pat Gelsinger has talked about the company’s multi-faceted chip portfolio and predicted Intel will be the biggest supplier of AI systems on foundry by 2030 with help from Amazon. Amazon, Google and to be renamed Meta are all building their own AI chips in-house to compete with the current badge rallier of AI — NVIDIA.