Nvidia is using Amazon's desperation for its chips to its advantage
How is Nvidia using the high demand for its GPUs to its advantage according to the article?
Nvidia is capitalizing on the high demand for its GPUs by expanding into cloud services and requiring customers to build more data center capacity specifically designed for its chips. This maneuver has put Nvidia in a position where its own customers are helping it compete with them. Additionally, the company has diversified its business into the world of cloud service software and rentals, launching DGX Cloud, which rents Nvidia-powered servers from within AWS's data centers and leases them back to Nvidia's customers.
What is the DGX Cloud service offered by Nvidia, and how does it compete with some of Nvidia's own customers?
DGX Cloud is a cloud service offered by Nvidia that provides access to Nvidia-powered servers for AI training. It competes with some of Nvidia's own customers, such as Microsoft and Amazon Web Services, by renting out these servers from within AWS's data centers and leasing them back to Nvidia's customers, promising greater computing capability. This strategic move has positioned Nvidia to compete with its own clients while leveraging its powerful GPUs and expanding its business into cloud services.
Why did AWS initially hesitate to allow Nvidia to set up DGX Cloud within its data centers?
AWS initially hesitated to allow Nvidia to set up DGX Cloud within its data centers because DGX Cloud is a competitor to some of Nvidia's own customers, including Amazon Web Services2. AWS was concerned about upsetting Nvidia, its crucial chip supplier. However, once other rival companies agreed to the terms of DGX Cloud, AWS had no choice but to relent, as it couldn't risk souring its relationship with Nvidia1.