Tech
May 28, 2026
Snowflake Signs $6B Deal with AWS for AI CPU Chips
Snowflake has signed a $6 billion, five-year agreement with Amazon Web Services (AWS) to use AWS's …
The Massive Deal
Cloud data storage giant Snowflake has signed a new $6 billion five-year agreement with Amazon Web Services, the companies announced on Wednesday. This deal is significant, as Snowflake has sold $7 billion worth of its services via AWS Marketplace since its founding in 2012.
Driving Growth with AI
The growth is driven by AI, with Snowflake offering its AI building tool, Cortex AI, which provides features like text interfaces for database queries and summary reports. The increasing demand for AI processing power has led to a surge in CPU usage, with AWS's home-grown ARM-based CPU chip, Graviton, being a key component.
The Financial Impact
Snowflake's spending on AWS is expected to double in 2025 to $2 billion for that calendar year alone.
Snowflake has sold $7 billion worth of its services via AWS Marketplace since its founding in 2012.
The new deal is worth $6 billion over five years.
The Impact on the Industry
The deal highlights the growing competition in the AI chip market, with cloud providers like AWS, Google, and Microsoft developing their own AI chips. Nvidia, a leading AI chip maker, is facing increased competition from these cloud giants.
The Future Outlook
As AI continues to drive growth in the cloud computing market, companies like AWS, Snowflake, and Nvidia are poised to benefit. The increasing demand for AI processing power will likely lead to more deals like this one, as cloud providers and AI chip makers compete for market share.
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