Nvidia is capitalizing on the high demand for its GPUs by branching out into rental and cloud services software. The company’s cloud service, DGX Cloud, competes with customers like Microsoft and Amazon Web Services by renting Nvidia-powered servers from AWS data centers and then leasing them to Nvidia customers. Although AWS initially hesitated to allow this competition, it ultimately gave in due to its reliance on Nvidia as a chip supplier. Nvidia’s strategic positioning allows it to compete with its own customers while maintaining a cooperative relationship. Additionally, the company requires customers to prove they have expanded data center capacity to house the GPUs they purchase and provides guidance on rack design to accommodate Nvidia chips, making it difficult for customers to switch to competitors’ chips easily. While Nvidia and AWS continue to work together for now, both companies face competition from one another as AWS develops its own AI chips that aim to rival Nvidia’s offerings. Despite Nvidia’s success in becoming the world’s most valuable company, the company may face challenges in the form of antitrust investigations by the Justice Department looking into possible anti-competitive behavior in the semiconductor market. Nvidia declined to comment on the potential investigation.
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https://www.businessinsider.com/nvidia-advantage-amazon-desperation-for-gpu-chips-2024-6
