Concerns over rising cloud computing expenses are driving some of NVIDIA’s customers, including Capital One, to explore alternatives to Amazon Web Services (AWS), according to leaked internal documents. The high costs associated with AWS appear to be a pain point for businesses heavily reliant on cloud infrastructure, particularly as demand for artificial intelligence (AI) workloads grows.

Capital One evaluates alternatives

Capital One, a financial institution under Bank of America, voiced its concerns about the escalating costs of AWS during a technology discussion with NVIDIA. The company highlighted its rising expenditures on AWS as it adapts to increased demand for GPUs and inference models. According to the internal document, Capital One warned that AWS costs could soon become "uncontrollable."

While the financial giant acknowledged its continued partnership with AWS, it also expressed an interest in exploring alternatives. NVIDIA and Capital One reportedly discussed potential solutions such as "AI factories", which involve building internal data centers, and emerging cloud providers specializing in AI workloads. Both options could offer viable substitutes for renting resources from traditional cloud providers.

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Industry-wide frustrations with AWS pricing

Capital One is not alone in its concerns. AWS, one of the dominant players in the North American cloud services market, has faced widespread criticism within the industry for its pricing. A growing number of companies, including AI startups, are reportedly shifting to competitors that offer more flexible and cost-effective solutions. Emerging providers allow customers to rent GPU computing power on demand and pay based on actual usage, contrasting with AWS’s typical hourly billing model.

In response to these critiques, AWS reaffirmed its commitment to lowering costs for customers. "AWS emphasized that its pricing philosophy involves continuously striving to reduce its own costs and passing those savings on to customers through lower prices", the document noted.

Rise of alternative cloud providers

As customers seek to diversify their cloud strategies, alternative providers are gaining traction in the market. Prominent names in this emerging space include CoreWeave, Lambda, Crusoe, and Nebius. NVIDIA has been actively collaborating with several of these companies, likely motivated by a desire to decrease its reliance on traditional cloud giants.

The shift to multiple cloud providers is becoming increasingly common among enterprises. A report from RBC Capital Markets revealed that 43% of businesses now use more than two public cloud service providers as a cost-saving measure.

Declining dominance of traditional cloud giants

Although AWS remains a market leader alongside Microsoft Azure and Google Cloud – together accounting for 63% of enterprise cloud spending as of the third quarter – its market share has been gradually eroding. Data from Synergy Research Group shows that AWS’s dominance peaked in the second quarter of 2022 and has been declining since then. Meanwhile, Oracle and newer players in the cloud space have seen slow but steady growth.

While AWS continues to play an integral role in supporting enterprise AI workloads for institutions like Capital One, the increasing availability of specialized, cost-efficient solutions may signal a broader shift in the cloud computing landscape. For now, the push for alternatives underscores a growing demand for flexibility and affordability amid the rapid expansion of AI-driven technologies.

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