Amazon and Anthropic Complete Massive Chip Project

Amazon announced on Wednesday that it has completed a major data center project and that Anthropic will use 1 million specialty chips by the end of 2025. This development comes as competition for artificial intelligence chips increases among major tech companies.

Anthropic announced last week that it will also use Google's custom chips known as TPUs. This multi-billion dollar deal raised some questions about the future relationship between Amazon and Anthropic.

Amazon stated in its press release that Anthropic will use 500,000 Trainium2 chips to run Claude AI models. This is happening as part of a massive artificial intelligence computing cluster that the tech giant calls Project Rainier. This cluster is spread across various data centers, including those in Mississippi and Indiana.

Artificial intelligence computing clusters function as a single system that can train and run AI models by combining thousands of specialty chips across servers.

Amazon also noted that Anthropic's models will use over 1 million Trainium2 chips in total this year. Hedgeye Risk Management analyst Andrew Freedman commented on the situation, saying, "This is a big deal for Amazon because there are concerns about whether it has the infrastructure advantage that Google has in the market." He also noted that this agreement could represent several billion dollars annually for Amazon Web Services.

Amazon's spokesperson declined to comment on these forecasts. Meanwhile, the expanding partnerships that Amazon and Google have established with artificial intelligence developers highlight the increasing competitive pressures on Nvidia. Various AI cloud providers are taking steps to reduce their dependence on Nvidia by ramping up their in-house chip initiatives.

Dave Brown, the vice president of computing and machine learning at Amazon Web Services, stated, “Nvidia is currently the starting point for most customers when they think about AI. However, there are many chips competing for the workloads, one of which is Trainium. It is very important for us to have an environment where customers can choose.”

Project Rainier is said to be one of the world's largest artificial intelligence computing clusters, and it represents the largest deployment of Amazon's custom chips to date. The project became fully operational just a year after its initial announcement in December 2024.

Brown added, “We will continue to grow in the coming years.” Amazon has invested $8 billion in Anthropic since 2023, and Anthropic has used these chips to create, train, and run its own Claude AI models.

Wall Street analysts are concerned about the recent circular agreements among leading AI companies. Infrastructure providers Amazon and Nvidia have entered into a cycle where if they invest in their customers, those customers respond by purchasing more products. This dynamic raises fears that the demand for artificial intelligence may be overstated and creates concerns about a market bubble.

Amazon shares have risen 4.5% this year. Considering the company's enormous spending on artificial intelligence amid a massive wave of layoffs, it is expected to announce its quarterly earnings on Thursday.