Snowflake has secured a $6 billion five-year contract with Amazon Web Services (AWS), bolstering its cloud infrastructure with AI CPU chips. The deal, announced on Wednesday, highlights the ongoing growth and reliance on AWS's services.
Significance of the New Deal
This new agreement approaches the total revenue Snowflake has generated via AWS Marketplace since its inception in 2012, which AWS states is $7 billion. Snowflake's increasing reliance on AWS is evident as its customers' spending doubled to $2 billion in 2025 alone.
AI Driving Increased Demand
AI is a significant factor driving this growth. Snowflake's AI tool, Cortex AI, enhances enterprise data usage with features like natural language queries and summary reports. The demand for AI capabilities has pushed Snowflake to secure more access to AWS’s Graviton CPU chips.
Competitive Landscape in AI Chips
As AI applications transition from training to daily use, CPU demand rises, with AWS's Graviton chips offering a cost-effective solution. Amazon CEO Andy Jassy has highlighted their superior price-performance ratio compared to Nvidia's offerings, although AWS continues to utilize Nvidia chips extensively.
Other tech giants are also developing proprietary AI chips, with Google and Microsoft both active in this space. Nvidia remains a dominant player, with CEO Jensen Huang recently unveiling the Vera AI CPU, which he claims opens a $200 billion market for the company.
Cloud Providers Gaining from AI Boom
Cloud providers like AWS are benefiting significantly from AI's rise. AWS's recent deals, including a major agreement supplying Graviton chips to Meta, underscore this trend despite Meta's existing $10 billion contract with Google Cloud.
Nvidia's market presence remains strong, but AWS's deals indicate that competitive AI CPU offerings from cloud providers are gaining traction. Regardless of which companies lead the AI revolution, cloud providers are poised to capture a substantial share of the market.
Source: https://techcrunch.com/2026/05/27/in-more-good-news-for-amazon-snowflake-signs-6b-deal-with-aws-for-ai-cpu-chips/
