Amazon.com Inc's (AMZN  ) cloud unit announced a partnership with AI startup Hugging Face to simplify running thousands of AI models on Amazon's custom computing chips.

On Wednesday, Amazon and Hugging Face announced a collaboration to enable this on Amazon Web Services (AWS) custom chip called Inferentia2, Reuters reports.

Valued at $4.5 billion, Hugging Face has become a key platform for AI researchers and developers to share chatbots and other AI software.

Amazon, Google's Alphabet Inc (GOOG  ) (GOOGL  ), and Nvidia Corp (NVDA  ) back Hugging Face, among others.

It is the primary destination for developers exploring open-source AI models such as Meta Platforms Inc's (META  ) Llama 3.

"Efficiency is crucial to us - ensuring that as many people as possible can run models cost-effectively," said Jeff Boudier, head of product and growth at Hugging Face.

AWS aims to attract more AI developers to use its cloud services for AI delivery. While Nvidia leads in training models, AWS claims its chips can operate those trained models - an inference process - at a lower cost over time.

Recent reports indicated that Matt Garman will take over as AWS CEO, succeeding Adam Selipsky, effective June 3.

During its latest quarterly results, Amazon announced that AWS became a $100-billion annual revenue run rate business.

AWS led the global cloud service market in the fourth quarter, accounting for 31% of total cloud spending.

Amazon analysts had highlighted the upside of AI chip development and diverse large language model offerings.

Amazon stock gained 59% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund - Consumer Discretionary (XLY  ) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS  ).

Price Action: AMZN shares traded higher by 0.39% at $183.96 at the last check on Thursday.