Why Did Amazon Buy Annapurna Labs?

Andy Jassy says Amazon did not buy Annapurna Labs in 2015 for AI chips. He calls the Annapurna team one of the most talented he has worked with, and the deal one of the best acquisitions in Amazon's history, if not the best.

Amazon had been working with Annapurna on a network card that offloaded virtualization, networking, security, and storage so nearly 100 percent of an EC2 server could go to customer compute. That card ended up in every server. Andy Jassy says Intel then had virtually all of the CPU share and was not driving price performance, so the Annapurna team built Graviton. He says 99 percent of Amazon's top 1,000 EC2 customers use Graviton, and it delivers about 40 percent more price performance than other x86 processors.