πππPricing Power: NVIDIA, Amazon or Microsoft - Who holds the key? In the current AI infrastructure landscape, pricing power has shifted as companies move from generic compute to proprietary stacks.
$NVIDIA(NVDA)$ still holds the ultimate pricing power at the hardware layer. Demand for GPUs continues to outpace supply, allowing NVIDIA to maintain huge operating margins of over 60%.
$Amazon.com(AMZN)$ is rapidly gaining ecosystem pricing power. It backs both Anthropic & OpenAI & ensures that regardless of which model wins, the traffic stays on AWS. Its custom Trainium3 chips is 50% cheaper than Nvidia.
$Microsoft(MSFT)$ holds integrated software pricing power. Its deep control over the entire stack - from custom chips to Office 365 Copilot, allows it to scale margins through software rather than just infrastructure rental.
Time will tell who will ultimately hold the key to pricing power.
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