Amazon has launched Graviton5, a custom processor for AWS, to strengthen its control over AI and cloud infrastructure costs as it competes with Nvidia, AMD, and Intel in the data center chip market.

What happened: Amazon.com introduced Graviton5, a custom processor for Amazon Web Services (AWS), which is now generally available for customers. The chip is designed for AI and high-performance cloud workloads using in-house silicon.

Why it matters: AWS custom chips help Amazon tune performance, reliability, and cost for specific workloads such as generative AI and large-scale applications. AWS already reports a custom chip business that exceeds US$20b in annual revenue. By owning more of its cloud technology stack—from hardware through software services—Amazon can support margins while capital spending on data centers and AI ramps up, and may reduce dependence on external chip suppliers in a competitive market.

What to watch: Graviton5 is now generally available. Key customers such as Meta, Uber, Snowflake, and Anthropic have the opportunity to adopt Graviton-based instances for production work, which would signal whether the chip's cost and performance advantages are winning market share.