Snowflake signed a $6 billion, five-year agreement with Amazon Web Services to supply chips for artificial intelligence workloads, the companies announced.
The deal marks one of the largest public cloud chip commitments by an enterprise data company and puts pressure on Nvidia, which has dominated AI hardware supply chains through its graphics processing units, or GPUs — chips originally designed for rendering images but now widely used to train and run AI models.
The AWS Bet
AWS supplies CPU-based chips, including its in-house Trainium and Inferentia processors, as alternatives to Nvidia’s GPU lineup. Snowflake’s decision to anchor a multi-billion-dollar commitment to that stack signals growing enterprise confidence in non-Nvidia AI silicon.
Snowflake provides cloud-based data warehousing and analytics services. Its infrastructure costs are among its largest operating expenses, making long-term chip supply agreements a direct lever on its margins.
The five-year term locks in pricing and capacity at a time when AI chip demand has outpaced supply across the industry.
Nvidia’s Position
Nvidia has faced a series of signals from major cloud and enterprise customers exploring alternatives. Amazon, Google, and Microsoft have all developed proprietary AI chips to reduce dependency on Nvidia hardware and negotiate better cost structures.
Still, Nvidia retains dominant market share in AI training workloads. Reuters has reported that Nvidia’s data center revenue reached $47.5 billion in fiscal year 2025, reflecting sustained enterprise demand even as alternatives emerge.
The Snowflake agreement does not specify whether AWS’s proprietary chips will fully replace Nvidia GPUs in its workloads or supplement them.
Snowflake’s Cloud Strategy
Snowflake has historically run across multiple cloud providers, including AWS, Microsoft Azure, and Google Cloud. A commitment of this scale to AWS suggests the company is consolidating a larger share of its infrastructure spend with Amazon.
AWS is the world’s largest cloud provider by revenue. Amazon's 2024 annual report shows AWS generated $107.6 billion in revenue that year, up 17% year-over-year.
Snowflake reported $3.6 billion in product revenue for its fiscal year ending January 2025, according to company filings. The $6 billion AWS commitment over five years represents a significant portion of its projected infrastructure spend relative to that revenue base.
The deal comes as Snowflake pushes deeper into AI-assisted data querying and machine learning features built into its platform. Those capabilities require sustained, scalable chip access to function at enterprise scale.
AWS has been aggressively courting large enterprise customers with long-term capacity agreements, particularly as demand for AI infrastructure has strained data center buildouts globally. The International Energy Agency projected in 2024 that data center electricity consumption could double by 2026, reflecting the pace of that expansion.
