Uber expands contract with Amazon to use AI chips

On Tuesday, Amazon announced that Uber is expanding its contract for AWS cloud services to utilize more of its ride-sharing features on Amazon's chips. Uber will particularly increase its use of Graviton, a low-power, ARM-based server CPU, and start a new trial with Trainium3, AWS's AI chip competitor to Nvidia. This deal is more about Amazon's demonstration of strength against cloud competitors like Google and Oracle than a long-term threat to Nvidia.

Historically, Uber operated its own data centers, but in 2023, the company signed large multi-year cloud computing contracts with Oracle and Google. The aim was to move the majority of its IT infrastructure off its own data centers and onto these two clouds. Even in December, Uber publicly reiterated this goal, stating in a blog post that in February 2023, the company began transitioning from on-premise data centers to the cloud using OCI and Google Cloud Platform, tackling the dual challenge of shifting massive workloads and introducing ARM-powered compute instances into a previously x86-dominated environment.

In this context, the use of ARM chips made by Ampere in Oracle's cloud is noteworthy. Interestingly, Ampere was founded by former Intel executive Renee James, who leveraged her connections after not being promoted to CEO at Intel to raise funds for the company. Oracle owned about one-third of Ampere, and James had to relinquish her status as an independent Oracle director due to this investment.

In December, Ampere was acquired by major competitor Softbank, and Oracle sold its stake for a substantial profit. James left Oracle's board at the end of 2024 and is no longer with Ampere. Oracle is rapidly raising funds to build data centers for OpenAI and Stargate, with Ellison stating that the sale of Ampere was driven by the belief that designing chips in-house was no longer a competitive advantage.

Now, AWS is announcing that it has secured a larger contract from one of Oracle's star customers, Uber, thanks to its in-house designed chips. Uber joins major tech companies like Anthropic, OpenAI, and Apple that have signed on or increased their usage of AWS due to these AI chips. In December, Amazon CEO Andy Jassy stated that Trainium was already a multibillion-dollar business.