Analyst: Walmart is building massive AI cloud to take on Amazon.
Walmart, which is building its own cloud-based data centers, will be using more—a lot more—Nvidia chips going forward, according to a research note from Global Equities Research.
In doing so, the retail giant joins a number of cloud computing providers like Amazon Web Services that are using more of what’s known as graphical processing units, or GPUs, to crunch data for machine learning. GPUs, the thinking goes, are better suited for analyzing huge data sets or controlling autonomous cars than more general-purpose chips that are used for more typical computing.
Over the next six months, Walmart wmt will go “full steam” into deep neural networks, using clusters of Nvidia chips, Global Equities analyst Trip Chowdhry says in a note released Tuesday, which Barrons first spotted. Neural networks, a subset of artificial intelligence (AI), are sophisticated computing systems that mimic how the human brain learns.
Chowdhry says that Walmart is building a “GPU farm” that will be about a tenth of the size of rival Amazon Web Services “GPU” cloud. He does not identify any sources.
The business context here is important. Walmart has seen AWS parent company Amazon amzn eat into its business for years and is thus loathe to use AWS cloud services for its own computing needs. That’s one big reason it built its own OneOps cloud while also making that OneOps core technology available for other companies to use.
Walmart is not the only retailer wary of putting its IT budget into AWS services. On Tuesday, the day after Amazon closed its $13.7 billion acquisition of grocery chain Whole Foods, CNBC reported that Target is scaling back its own use of AWS. What was most surprising to many about that report was the notion that Target used AWS to begin with. But then again, software developers at big companies often AWS to build test versions of their software without their bosses knowing.
A Target spokesman said that company has used and will continue to use multiple cloud providers—which he did not name. Early this year it evaluated that lineup and decided to make some changes, he added, without additional detail.
Neither Walmart nor Amazon could be reached for comment.
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Going further back, in June after the Whole Foods deal was announced, Walmart reportedly told its partners and suppliers to stop using AWS services. The good news for retailers that are wary of using a competitor’s cloud services is that Microsoft msft Azure and Google goog Cloud Platform are now seen as viable alternatives for many customers.
Note: (August 30, 2017 4:49 p.m. EDT) This story was updated to add comments from Target.