In more good news for Amazon, Snowflake signs $6B deal with AWS for AI CPU chips

Cloud data storage giant Snowflake has signed a new $6 billion five-year agreement with Amazon Web Services, the companies announced on Wednesday.

Snowflake has always run on AWS, though obviously, these days, it is also available on Microsoft Azure and Google Cloud. For comparison on just how big this deal is for these companies, Snowflake has sold $7 billion worth of its services via AWS Marketplace since Snowflake was founded in 2012, AWS says. So this new contract is close to all the money it has ever brought in from that cloud.

It can do that because Snowflake’s customers are accelerating their spending on AWS as of late, Snowflake says, doubling in 2025 to $2 billion for that calendar year alone.

What’s driving the growth is, naturally, AI. Snowflake has been offering its AI building tool, Cortex AI, for a couple of years now. It’s a tool that makes sense: Snowflake is where much of an enterprise’s data lives. The AI tool can provide features like a text interface for database queries (just ask, in regular language), summary reports, and so on.

Of particular note is that Snowflake is signing this contract for more access to AWS’s home-grown ARM-based CPU chip, Graviton.

As AI moves from training to daily usage to automation via agents, CPU usage skyrockets. While GPUs handle training and reasoning, CPUs handle most of the rest of the tasks associated with AI, particularly agents.

Amazon CEO Andy Jassy last month boasted that Amazon’s own homegrown AI chips offer “better price-performance” than Nvidia’s offerings, though AWS still uses Nvidia’s chips in its cloud. Demand is so high for AI processing that cloud providers like AWS are deploying chips as fast as they can. On top of that, all of the major AI model makers (and many other AI offerings) have architected their apps specifically for Nvidia’s chips.

Still, Amazon’s own chips are a more affordable option for the cloud giant to deploy. Amazon, ever the price-conscious company, says it passes those savings along to its customers.

Consequently, these chips are luring in new multibillion-dollar deals. Last month, for instance, AWS signed a deal to provide millions of Graviton chips to Meta for its growing AI compute needs. That was a big win for AWS because Meta had signed a $10 billion deal with Google Cloud a few months earlier.

More than that, these deals are serving as notice to Nvidia that competitive CPUs from the cloud giants are attempting to come for its lunch. Google has also been making its own AI chips for years. Microsoft just launched its Maia AI chip in January.

Not surprisingly, Nvidia CEO Jensen Huang said last week that he’s more than ready to defend, and even grow, his turf. The new AI-specific CPU his company launched, called Vera, represents a “brand new” $200 billion market for Nvidia, he proclaimed after delivering another record-breaking quarter last week. And he’s already sold $20 billion worth, he said.

While Nvidia may not be giving up market share to Amazon or any cloud provider that easily, AWS’s multibillion-dollar cloud deals show how AI is lifting its boat. Whichever companies benefit most from the rise of AI in our work and home lives, the cloud providers are getting their share.