Is Amazon's Trainium chip the 'dupe' that could finally disrupt Nvidia's AI dominance?

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Hello. South Korea's president rescinded his martial law declaration. Its government is still in crisis, and opposition lawmakers have started impeachment proceedings. Our global news team has been covering this developing story — keep up with our coverage here.

In today's newsletter, Amazon's touting new hardware it hopes can help it unseat Nvidia as the king of AI chips.

What's on deck:

• Markets: These charts show how stretched stock market valuations are.
• Tech: Keep an eye on these 45 VCs who are set to do big things in 2025.
• Business: Gen Z's credit-card debt is becoming a problem.

But first, I don't need the name-brand stuff.

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The big story

Amazon's affordable AI

'Dupes' are all the rage these days, so why not make one for AI chips?

That's basically Amazon Web Services' idea for breaking Nvidia's stranglehold on the AI market. The cloud giant made several announcements at its annual re:Invent conference focused on the cost efficiencies its tech can bring to AI development.

At the core is AWS' Trainium chip. The tech giant's homegrown chip is its answer to Nvidia's all-powerful GPUs, which are widely used for training AI models.

Chips are only half the battle, though. As the expectations for AI models keep rising, so does the number of chips needed to train them. Companies have to be creative about combining so many chips (and avoid overheating issues), and Amazon thinks it has a solution for that, too.

AWS CEO Matt Garman detailed how customers can get the most out of their AI chips with 'UltraServers' — multiple Trainium servers smartly pieced together — and the 'UltraCluster' — what you get when you combine multiple 'UltraServers.'

That might sound like a lot of fancy names and confusing terminology (and it is), but it boils down to AWS pitching itself as a cheaper way to leverage more compute as concerns grow about AI bottlenecks.

Amazon can't just rely on offering a cheaper alternative when taking on Nvidia.

Yes, diversifying your supply chain so you don't have to rely on a single company for a key piece of hardware is a good selling point.

Nvidia has a trump card, though: CUDA. The acronym (I could tell you what it stands for, but would it really matter?) represents a big moat Nvidia has around its business.

CUDA is a software platform that developers use to work with Nvidia GPUs. What started small in 2007 has evolved into a trove of training data, tools, and other assets that are helpful for customers building with AI.

It's a problem AWS has even acknowledged, at least internally. Documents viewed by BI's Eugene Kim repeatedly cited CUDA as the biggest hangup stopping customers from leaving Nvidia.

The CUDA conundrum could come to a head soon. AI startup Anthropic, which also uses Nvidia GPUs, is helping AWS build out its 'UltraCluster.' It's part of a $4 billion investment Amazon recently made in the AI startup, which includes Anthropic using AWS as its "primary cloud and training partner."

News brief

Top headlines

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• Marc Benioff ruptured his achilles tendon. He said he doesn't give a 'Fakarava' as Agentforce hope stirs Salesforce stock.
• Elon Musk lost his Tesla pay fight. Here's what he can do next.

3 things in markets

1. Crypto investing for dummies. Bitcoin is nearing the $100K mark off the back of President-elect Donald Trump's victory last month. A financial advisor who specializes in alternative assets shared common mistakes to avoid before diving into crypto investing. (Rule No. 1: Just because it's good now doesn't mean it'll stay that way, so don't go crazy on crypto.)
2. See how the stock market has been pushed to the limit. The S&P 500 is up more than 27% and notched over 50 record closing highs. But stocks' sky-high valuations have some analysts concerned the market is stretched too thin. These five charts show how pricey things have gotten.
3. How Bank of America sees 2025 shaping up. The bank forecasted US GDP growth of 2.3% next year, but it sees sticky inflation as a potential headwind. BofA is also predicting three more rate cuts — December, March, and June — before the Fed settles on a rate of 3.75% to 4%. (However, Ned Davis Research sees 2025 being an uphill battle for stocks.)

3 things in tech

1. Introducing VC's rising stars. BI readers and top venture capitalists named 2024's best up-and-coming investors. They come from firms both big and small, and invest in startups across all sectors and stages.
2. Intel could consider splitting off its chip factories. Intel's former CEO Pat Gelsinger opposed this strategy. The recent news of his exit has reopened the question, but a break up wouldn't be easy since the company must maintain majority control for its CHIPS Act funding. Regardless, Intel's interim leaders and Gelsinger's successor face an uphill battle. The contest to become the new CEO is on, and the chipmaker is reportedly looking at two candidates, including an outsider.
3. This year's Cyber Monday just shattered e-commerce records. Depending on which you ask, US shoppers spent $13.3 billion (per Adobe) or $12.8 billion (per Salesforce) on Monday alone. Deep discounts made the e-tail holiday the biggest online shopping day ever.

3 things in business

1. Life with plastic is fantastic, but beware of all that debt. Gen Z is much more comfortable using credit cards than their millennial counterparts were at that age. The younger generation tends to prioritize fun over finances, and it's led them to rack up debt at a faster rate than any other age group.
2. Call Her Bartender. Recent trademark filings suggest the "Call Her Daddy" podcaster is looking to launch her own alcohol brand under the name "Popular Vodka by Unwell." The product would make her the latest to join the celebrity booze-biz game.
3. Is time up for BuzzFeed? The digital publisher was supposedly worth $2 billion a few years ago. It's now worth much less and has been scrambling to solve a looming $124 million debt problem. All of it is expected to come to a head this week, and BuzzFeed may have to sell assets, like its interview show "Hot Ones."

What's happening today

• US Supreme Court hears case on gender-affirming care for transgender youth.
• French Prime Minister Michel Barnier's minority government faces two votes of no confidence in Parliament.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Spriha Srivastava, UK bureau chief, in London. Amanda Yen, fellow, in New York. Lisa Ryan, executive editor, in New York. Milan Sehmbi, fellow, in London.