Snowflake Locks Deal with AWS for $6B: AI-Powered Growth on Cloud

Cloud data storage powerhouse Snowflake has announced a landmark $6 billion five-year agreement with Amazon Web Services (AWS) on Wednesday. This deal underscores the significant growth of artificial intelligence (AI) in enterprise computing and the crucial role that cloud providers are playing in this transformation.

Snowflake, which primarily runs on AWS but is also available on Microsoft Azure and Google Cloud, has sold $7 billion worth of its services via AWS Marketplace since it was founded in 2012. This new contract is nearly equivalent to all the money Snowflake has brought in from that cloud platform. The surge in AI spending by Snowflake's customers has doubled their spend to $2 billion for 2025 alone, driven largely by advancements in AI.

AI and Cloud Integration

A key driver of this growth is the rise of AI. Snowflake offers its AI building tool, Cortex AI, which leverages data stored within its platform to provide features like natural language text interfaces for database queries, summary reports, and more. This integration highlights how AI tools can enhance data management and analysis.

Graviton Chips: A Game Changer

A significant aspect of this deal is Snowflake's increased access to AWS’s Graviton ARM-based CPU chips. As AI applications shift from training to daily usage, and then to automation via agents, the demand for CPUs skyrockets. While GPUs handle training and reasoning tasks, CPUs manage most other tasks associated with AI, including agent operations.

Amazon CEO Andy Jassy has boasted that AWS’s homegrown AI chips offer “better price-performance” than Nvidia's offerings. Despite this, AWS still uses Nvidia’s chips in its cloud infrastructure. The high demand for AI processing is prompting cloud providers like AWS to deploy these custom chips as fast as possible.

Competitive Landscape

The competition in the AI chip market is heating up, with major players like Google and Microsoft also developing their own AI-specific hardware. While Nvidia CEO Jensen Huang declared that his company's Vera AI chip represents a $200 billion opportunity, Amazon’s Graviton chips are presenting a formidable challenge.

Amazon has already secured another significant deal, providing millions of Graviton chips to Meta for its growing AI compute needs. This move not only underlines the rising importance of AI but also serves as a notice to Nvidia that competitive CPUs from cloud giants are vying for market share.