Uber Adopts Amazon's AI Chips, a Blow to Nvidia and Oracle

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Key Takeaways

1Uber has extended its contract with AWS to use Amazon's Graviton and Trainium chips.

2Historically, Uber migrated its infrastructure to the cloud with Google and Oracle.

3Ampere, founded by a former Intel executive, has been sold to Softbank, with Oracle having divested its stake.

💡Why it matters — Uber is strengthening its collaboration with Amazon, which could influence its relationships with Oracle and Nvidia.

Uber Turns to Amazon's AI Chips

On Tuesday, Amazon announced that Uber is expanding its contract for AWS cloud services, allowing the ride-hailing company to run more of its features on Amazon's chips. Uber will particularly increase its use of AWS Graviton processors, which are low-power servers based on ARM architecture. Additionally, Uber will begin a new trial with Trainium, an AWS AI chip that directly competes with Nvidia.

This agreement does not pose an immediate threat to Nvidia, but it is a strategic move by Amazon to differentiate itself from its competitors in the cloud space, notably Google and Oracle.

Uber's Transition to the Cloud

Historically, Uber managed its own data centers. However, in 2023, the company signed significant multi-year cloud computing contracts with Oracle and Google. The goal was to move the majority of its IT infrastructure from its own data centers to these two cloud platforms.

Even in December, Uber reaffirmed this goal by publishing a blog post that explained: "In February 2023, Uber began the transition from on-premises data centers to the cloud using OCI and Google Cloud Platform, taking on the dual challenge of moving massive workloads and introducing ARM-powered compute instances into an environment previously dominated by x86."

In this post, Uber specifically mentioned the use of ARM chips manufactured by Ampere in Oracle's cloud, making the situation even more intriguing.

The Story of Ampere and Its Implications

To understand the complex connections in Silicon Valley, it is helpful to look at the history of Ampere. Founded by Renee James, a former Intel executive, after she was not promoted to CEO, Ampere was created through James's extensive contacts. She leveraged her influence as an investor in the private equity firm Carlyle and her seat on Oracle's board to raise funds for the company. Oracle owned about a third of the company, and James had to give up her status as an independent director at Oracle due to this investment.

In December, Softbank, Ampere's main competitor, acquired the company, and Oracle sold its stake, realizing a pre-tax gain of $2.7 billion. James left Oracle's board at the end of 2024 and is no longer working at Ampere.

Oracle and Its New Priorities

Oracle, for its part, is raising funds as quickly as possible to build data centers for OpenAI and Stargate. Larry Ellison, Oracle's founder, stated that the company sold Ampere because he believed that designing chips in-house for its data centers was no longer a competitive advantage. Oracle now prefers to buy chips and has signed huge contracts with Nvidia.

It is important to note that Oracle, Softbank, and Nvidia are also part of OpenAI's circular agreements, which aim to finance the massive construction of data centers for the model maker.

AWS and Its New Contracts

Now, AWS announces that it has secured a larger contract with one of Oracle's flagship clients, Uber, thanks to its in-house designed chips. Uber thus joins leading tech companies such as Anthropic, OpenAI, and Apple, which have signed or increased their use of AWS due to these AI chips. In December, Amazon CEO Andy Jassy stated that Trainium was already a multi-billion dollar business.