Amazon is reportedly in talks to acquire Decart, an AI startup that makes software to help developers get more out of their AI chips and switch between different chipmakers more easily. The deal is said to be worth about $7 billion, according to sources familiar with the matter.
Decart's software addresses a growing pain point in the AI industry: AI models are typically designed to run on specific chips, and moving them to a different chip requires significant engineering work. Decart's technology automates much of that heavy lifting, making it easier for companies to use chips from different vendors without starting from scratch.
Why Amazon wants Decart
Amazon has been pushing its own AI chip, called Trainium3, which is designed to be cheaper than Nvidia's offerings. The company has been selling these chips to AI developers, including Anthropic and OpenAI, and they have been popular due to their cost advantage.
But one of the biggest hurdles to wider adoption of Trainium3 is the same problem Decart solves: developers often have to rewrite their software to run on a new chip. By acquiring Decart, Amazon could make its own chips much more attractive, potentially accelerating their adoption and reducing its reliance on Nvidia.
This move is part of a broader trend among tech giants like Amazon, Google, Microsoft, and Meta, who are all developing their own AI chips to cut costs and reduce dependence on Nvidia. These in-house chips are often cheaper to run for specific tasks, and shipments of them are growing nearly three times as fast as off-the-shelf AI chips, according to one estimate. That's good news for companies like Broadcom, which help design them.
What it means for Nvidia
Nvidia makes some of the world's most powerful AI chips, but its dominance isn't just about performance. Much of the software powering AI is custom-written for Nvidia's technology, which makes switching to a rival chip expensive and time-consuming. This "lock-in" has been a key part of Nvidia's competitive moat.
Software like Decart's could change that. If developers can easily move their models to other chips, they gain more room to shop around or negotiate better prices. That could be bad news for Nvidia—which, awkwardly enough, is one of Decart's investors.
Easier switching could also help ease AI's computing bottleneck. If one supplier can't meet demand, developers can go elsewhere. Nvidia still dominates advanced AI chips, but rivals are gaining ground, and some offer lower running costs. Those savings look even sweeter when switching doesn't eat them up.
What it means for investors
For everyday investors, this deal is a reminder that the AI boom is not just about Nvidia. The competition among chipmakers is intensifying, and companies that enable flexibility—like Decart—could become increasingly valuable.
If Amazon's acquisition goes through, it could signal that the tech giant is serious about challenging Nvidia in the AI chip market. That could have implications for Nvidia's stock, as well as for companies like AMD and Intel that are also trying to gain market share.
It's also worth noting that Amazon has been making other moves in AI, such as reshuffling Alexa leadership as it bets on a paid AI assistant. And the broader AI landscape is evolving rapidly, with OpenAI targeting $70 billion in annual revenue by 2026.
For now, the Decart deal is still in talks, and there's no guarantee it will close. But if it does, it could be a significant step toward a more competitive AI chip market—one where customers have more choices and potentially lower costs.
As always, investors should keep an eye on how these developments unfold, as they could affect the fortunes of the biggest names in tech.
