①Capital One expressed concerns about the cost of AWS cloud computing during a technology conference with NVIDIA and is considering alternatives; ②NVIDIA noted in a document that the two companies discussed the possibility of AI factories and new cloud solutions as alternatives to AWS; ③Although Capital One stated it will continue its partnership with AWS, the high costs of AWS have been widely criticized within the industry.
According to an internal document of $NVIDIA (NVDA.US)$ , Capital One, a financial company under Bank of America, expressed concerns about cloud computing costs during a technology conference with NVIDIA, particularly regarding $Amazon (AMZN.US)$ 's cloud computing service (AWS).
Capital One has observed a growing demand for GPUs and inference models and believes that its costs on AWS will soon become uncontrollable. The company informed NVIDIA of its desire to find an alternative to AWS as the financial institution seeks to control expenses.
According to the document, NVIDIA and Capital One discussed AI factories and new cloud services. The former refers to enterprise-built internal data centers, while the latter represents emerging cloud service providers specializing in AI workloads. Both approaches can serve as alternatives to renting computing resources from third parties.
AWS is one of the leading cloud service providers in the North American market, supporting a broader range of computing needs than emerging cloud services, and remains a key partner for Capital One. Capital One utilizes artificial intelligence to perform tasks such as fraud detection, customer support, and algorithmic trading.
Emerging cloud services are gaining momentum.
The leading new cloud service providers include $CoreWeave (CRWV.US)$ , Lambda, Crusoe, and $NEBIUS (NBIS.US)$ . NVIDIA has been closely collaborating with several of these companies, partly to reduce reliance on traditional cloud giants.
At the same time, enterprises tend to procure multiple cloud services to reduce cloud expenditures. According to a recent report by RBC Capital Markets, 43% of companies use more than two public cloud service providers.
In response to this internal document, Capital One stated that it remains committed to its partnership with AWS. AWS emphasized that its pricing philosophy involves continuously striving to reduce its own costs and passing those savings on to customers through lower prices.
However, Capital One is not the only company raising concerns about AWS fees. According to internal documents from Amazon in March and July, due to the high costs of AWS, an increasing number of AI startups are relying on competing cloud platforms. Emerging cloud services allow customers to rent GPU computing power on demand and pay based on actual usage, whereas AWS typically charges by the hour.
Data from consulting firm Synergy also shows that AWS's market share peaked in the second quarter of 2022 and has been slowly declining since, while Oracle and other emerging cloud providers have seen gradual growth. However, as of the third quarter this year, the three major cloud service providers—AWS, Microsoft Azure, and Google Cloud—still accounted for 63% of enterprise spending on cloud infrastructure.
Editor /rice