Inc.’s cloud-computing unit on Tuesday announced two new custom computing chips aimed at helping customers outperform the cost of using Intel Corp and Nvidia Corp chips. The company released a third-generation Graviton chip designed to compete with Intel and Advanced Micro Devices central processing units. The Graviton three is 25% faster than its predecessor, and Dave Brown, Amazon’s vice president of Elastic Compute Cloud, told Reuters it expects better performance per dollar than Intel’s chips.

To satisfy their customers’ needs and demands Amazon’s vice president Dave Brown said that We’ve thrown the challenge on performance And I think in the coming years, you’ll see better performance from all of them Intel, AMD on price-performance specifically.

Amazon Web Services are also known as (AWS) is the world's biggest cloud computing provider and one of the biggest buyers of data center chips, whose computing power AWS rents out to its customers. Ever since buying a startup called Annapurna Labs in 2015, AWS has worked to develop its custom chips and it is working closely with Intel, AMD, and Nvidia.

For instance, it is working with Nvidia to pair its Graviton processors to provide a way for the Android game developer to stream its titles to devices. Brown said AWS wants to keep the computing market competitive by offering an additional chip choice. These services indicated that a new class of chips called Trainium, which is designed to train machine learning computer models and will compete against chips from Nvidia, will soon be available to its customers. AWS expects it to train machine learning models for a cost that is 40% lower than Nvidia's flagship chip.

The vice president and analyst at research firm, Gartner, Mr. Raj Bala asserted that the chip companies should take competition from AWS seriously over the long term, and for now; many cloud computing customers will want to use Intel and Nvidia chips because of decades of software have been written to run on them. In the long run, chip companies should take competition from AWS seriously, said Raj Bala, vice president, and analyst at research firm Gartner and only early adopters who can handle the complexity of re-writing their software are likely to try the new AWS chips.

The above said was very true when AWS launched a decade and a half ago it was used by small, tech-savvy customers. The company eventually expanded to mainstream companies and is now on its way to becoming as big as traditional companies like Cisco Systems Inc.