An Amazon stock analyst said the launch of Claude Opus 4, described by startup Anthropic as it's most powerful AI model, offers a positive signal for Amazon's effort to build an AI chip alternative to Nvidia's processors.
The close relationship between Amazon and Anthropic likely means that the latest Claude model was trained on a cluster of the latest generation of Amazon Web Service's Trainium chips, DA Davidson analyst Gil Luria said in a Friday note. Amazon has invested $8 billion into Anthropic and was named Anthropic's primary cloud partner for training AI models as part of that investment. The AI startup also said it would use AWS' custom Trainium and Inferentia chips to power future foundation models.
"Anthropic being capable of training what we are led to believe is one of the leading models on the market (with Opus 4), makes us incrementally more positive around the use of Trainium chips on AWS EC2 instances as a cost-effective alternative to Nvidia chips," Luria told clients. Luria rates Amazon stock a buy with a 230 price target.
Anthropic is the developer of the chatbot Claude, which competes against OpenAI's ChatGPT, Alphabet's Gemini and Meta Platform's AI chatbots. Amazon announced a $4 billion investment into Anthropic in September 2023, which the company doubled with an additional funding round last November.
Amazon's Push For Nvidia Alternative
As the leading cloud provider, Amazon is a major purchaser of Nvidia graphics processing units, or GPUs. It rents out that computing power to enterprises through AWS. But Amazon also develops its own chips, including AI-focused Trainium.
In a letter to shareholders last month, Amazon Chief Executive Andy Jassy said the company is looking to provide a lower-cost alternative to Nvidia.
"Most AI to date has been built on one chip provider. It's pricey," Jassy said. "Trainium should help, as our new Trainium2 chips offer 30%-40% better price-performance than the current GPU-powered compute instances generally available today."
At an AWS customer conference in December, Amazon unveiled a new "Ultraserver" designed to connect 64 of its Trainium chips. Amazon said at that time that it would work with Anthropic to build an "Ultracluster" of servers in a single data center that will be among the world's largest for training AI models.
"As part of Anthropic's expanded collaboration with AWS, they've begun optimizing Claude models to run on Trainium2, Amazon's most advanced AI hardware to date," the company said in the December press release. Anthropic will use hundreds of thousands of Trainium2 chips — over five times the size of their previous cluster — to deliver exceptional performance for customers using Claude in Amazon Bedrock."
Amazon Stock Lower On Tariff Threats
Meanwhile, Amazon stock fell 1% to close at 200.99. Stocks in general traded lower on the stock market today after President Donald Trump threatened a 50% tariff on European Union countries starting June 1.
Amazon stock is down 8% this year mostly because of concern about tariffs. But the stock was starting to recover, particularly after Trump announced a deal with China to lower tariffs.
