Snowflake has announced a significant commitment to invest $6 billion in Amazon Web Services (AWS) over the next five years, marking a notable increase in its spending on cloud infrastructure. This deal represents a substantial expansion of an ongoing partnership that began when Snowflake was founded 11 years ago.
The new commitment builds on Snowflake’s earlier agreements, which included $1.2 billion at its IPO in 2020 and $2.5 billion in 2023. The investment will leverage Amazon’s custom Graviton processors to enhance Snowflake's AI and data warehousing capabilities. The company, based in Bozeman, Montana, reported a strong fiscal first-quarter revenue of $1.39 billion, surpassing analyst predictions and causing its stock to rise by as much as 33% in after-hours trading.
This move is part of a broader trend, as AWS has secured multiple large-scale AI infrastructure commitments, including significant deals with companies like Anthropic and OpenAI. Amazon's custom chip division is becoming increasingly vital, generating over $20 billion annually, with growth rates in the triple digits.