Meta (META) has recently formalised a multiyear partnership with Amazon (AMZN) to integrate Amazon’s Graviton chips for enhancing its artificial intelligence (AI) operations. Unlike the conventional graphics processing units (GPUs) typically associated with AI tasks, Graviton is a central processing unit (CPU) that plays a significant role in the evolving landscape of AI.
With the emergence of AI agents—bots capable of performing tasks autonomously—CPUs have seen a resurgence in data centres. These AI agents can efficiently manage tasks like data retrieval from emails, information gathering from the web, and even making purchases, all of which benefit from CPU architecture. This trend has revived CPU sales, which had previously declined during the initial phases of the AI boom.
Recently, Intel (INTC) posted stronger-than-expected earnings for the first quarter, bolstered by robust demand for its data centre processors. In parallel, Nvidia (NVDA) is also making strides in CPU technology; in February, it announced a significant deployment of its Grace CPU-only servers in collaboration with Meta, aiming to introduce Vera CPU-only servers by 2027. AMD (AMD) similarly entered into a deal with Meta during the same period.
Amazon CEO Andy Jassy revealed in his annual shareholder newsletter that two major AWS clients had sought to secure all of Amazon’s CPU capacity for 2026, but he had to turn down their requests to maintain availability for other customers. In addition to the Graviton chips, Amazon also offers Trainium AI chips designed for training and inference in AI models, with contracts in place to supply Trainium capacity to companies like OpenAI and Anthropic.
Jassy highlighted that Amazon’s chip business currently boasts an annual revenue run rate of $20 billion, increasing at a remarkable pace. He pointed out that this figure likely underrepresents the actual growth potential, as it reflects only revenue generated through the AWS Elastic Compute Cloud (EC2) service. Were it to function independently, Amazon’s chip division could potentially reach a run rate of approximately $50 billion.
The growing demand for its chips has led Jassy to suggest that Amazon might eventually sell racks of them to external entities, indicating the lucrative opportunities that lie in their chip business.
In summary, Meta’s strategic partnership with Amazon marks a significant shift toward CPU utilisation in AI, reflecting a broader trend in technology where CPUs are reclaiming relevance in data processing and AI capabilities. As demand for efficient AI solutions continues to rise, the implications for major players like Meta, Amazon, Intel, Nvidia, and AMD could be considerable.
