Is Amazon developing a new networking chip to power its cloud servers in Israel?
According to tech news site The Information, the global giant is working on creating new silicon chips for its hardware network switches with Annapurna Labs, the Israeli company Amazon acquired for $350 million in 2015.
Amazon Web Services (AWS) is the world’s largest cloud company, with an estimated 47% of the entire cloud market in 2019. The company already builds its own switches, but the chips it uses are provided by Broadcom. Developing its own chip may allow Amazon to offer better performance and possibly provide new services not currently offered using Annapurna’s machine learning software, The Information said.
Amazon would be the latest computing giant to do chip development in Israel. Intel has developed many of its most popular chips in Israel, and Nvidia is now doing so as well through Mellanox, the company it acquired for $7 billion last year. Microsoft has been developing chips in Israel for years and is reportedly working on a secretive networking chip project for its Azure cloud service. Last week, Google said it would also launch a new chip R&D division in Israel as part of a plan to build its own motherboards. Google’s R&D units in Israel currently focus primarily on software.
Amazon has been aggressively expanding its AWS presence in Israel. The company is hoping to win a government tender to set up a massive cloud server farm in Israel and move much of the government’s IT infrastructure to the cloud, a project worth hundreds of millions of dollars. The company, which has been active in Israel since 2014, first established its cloud infrastructure in Israel two years ago, and in December invested $30m. to collaborate with AllCloud to increase cloud computing in Israel.