By Stephen Nellis

SAN FRANCISCO Amazon Web Services, the world's largest cloud computing provider, is considering using new artificial intelligence chips from Advanced Micro Devices Inc, though it has not made a final decision, an AWS executive told Reuters.

The remarks came during an AMD event where the chip company outlined its strategy for the AI market, which is dominated by rival Nvidia Corp.

Despite AMD disclosing some technical specifications for an AI chip coming later this year that could in some ways beat Nvidia's best current offerings on some metrics, the news sent shares down after AMD did not disclose a flagship customer for the chip.

In interviews with Reuters, AMD Chief Executive Lisa Su outlined an approach to winning over major cloud computing customers by offering a menu of all the pieces needed to build the kinds of systems to power services similar to ChatGPT, but letting customers pick and choose which they want, using industry standard connections.

"We're betting that a lot of people are going to want choice, and they're going to want the ability to customize what they need in their data center," Su said.

While AWS has not made any public commitments to use AMD's new MI300 chips in its cloud services, Dave Brown, vice president of elastic compute cloud at Amazon, said AWS is considering them.

"We're still working together on where exactly that will land between AWS and AMD, but it's something that our teams are working together on," Brown said. "That's where we've benefited from some of the work that they've done around the design that plugs into existing systems."

Nvidia does sell its chips piecemeal but is also asking cloud providers if they are willing to offer an entire system designed by Nvidia in a product called DGX Cloud. Oracle Corp is Nvidia's first partner for that system.

Brown said AWS had declined to work with Nvidia on the DGX Cloud offering.

"They approached us, we looked at the business model, and it didn't make a lot of sense," Brown said.

Brown said that AWS prefers to design its own servers from the ground up. AWS started selling Nvidia's H100 chip in March, but as part of systems of its own design.

(Reporting by Stephen Nellis in San Francisco; Editing by Kim Coghill)