Cloud data storage leader Snowflake has finalized a significant five-year agreement with Amazon Web Services (AWS) valued at $6 billion. This commitment underscores a deepening partnership between the two entities, as Snowflake continues to leverage AWS infrastructure to support its expanding enterprise data operations. The scale of this contract is particularly notable, as it nearly matches the total revenue Snowflake has generated through the AWS Marketplace since its inception in 2012.

The surge in spending is largely attributed to the rapid adoption of artificial intelligence tools. Snowflake has seen its customers significantly increase their investment in AWS, with expenditures projected to reach $2 billion in 2025. This growth is driven by the integration of Cortex AI, a platform that allows enterprises to perform complex database queries and generate automated reports using natural language processing. As AI agents become more prevalent in business workflows, the demand for robust computing power has intensified.

A central component of this new deal is Snowflake’s increased access to Graviton, Amazon’s proprietary ARM-based CPU chips. While GPUs remain essential for training large-scale AI models, CPUs are increasingly vital for the automation and reasoning tasks performed by AI agents. By utilizing its own custom-designed chips, AWS aims to offer superior price-performance ratios compared to traditional hardware, a strategy that has already attracted major clients like Meta.

This shift toward proprietary silicon highlights a broader trend among major cloud providers, including Google and Microsoft, who are increasingly developing their own hardware to reduce reliance on third-party suppliers like Nvidia. While Nvidia continues to dominate the AI hardware market with its own high-performance offerings, the aggressive expansion of cloud-native chips signals a new era of competition in data center infrastructure. As AI continues to reshape the tech landscape, cloud providers are positioning themselves to capture a significant share of the industry’s growth.