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The world’s largest semiconductor companies face a growing competitive threat: Their biggest customers make their own chips tailored to the supercharged areas of cloud computing and artificial intelligence.
Chip manufacturing has long been ruled by big manufacturers and design houses like Intel Corp., Advanced Micro Devices Inc., and graphics chip maker Nvidia Corp. Now Amazon.com Inc., Microsoft Corp. and Google are stepping in. in the game to seek better performance and lower costs, changing the balance of power in the industry and pushing traditional chipmakers to respond by building more specialized chips for major customers.
Amazon introduced a new chip this month that it says promises to speed up the way algorithms that use artificial intelligence learn from data. The company has already designed other processors for its cloud computing arm, called Amazon Web Services, including the brains of computers known as central processing units.
The pandemic has accelerated the rise of cloud computing as businesses have widely adopted the kind of digital tools that those remote servers use. Amazon, Microsoft, Google, and others have enjoyed strong cloud growth during the remote work period.
Business customers also show an increased appetite for analyzing the data they collect about their products and customers, driving demand for artificial intelligence tools to make sense of all that information.
