Since Amazon Web Services Inc. kicked off its hit parade of new products on Monday during the re:Invent conference in Las Vegas with the news that it would debut a new cloud chip of its own design called Graviton, speculation has risen that the company’s move could represent a threat to chip giant Intel Corp.

That’s a highly unlikely scenario, according to theCUBE’s analysts, because the total addressable market for processors is expanding.

“With that expansion of the market, Intel is going to take a big part of the share, so they are not in trouble,” John Furrier, co-host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, said during the Thursday kickoff analysis at AWS re:Invent. “Amazon has specialized things they want to build, like processors for GPU alternatives or inference engines that are tied to the stack. Why wouldn’t they?”

Furrier was joined at the conference by co-host Dave Vellante, and they discussed the potential impact of the new chip in the competitive semiconductor world, recent “internet of things” services announced by Amazon and Oracle’s current position in enterprise computing.

Acquisition paved way for new chip

Amazon’s custom Arm-based processor is an outgrowth of the company’s acquisition of semiconductor startup Annapurna Labs in 2015. The new chip can be deployed by AWS users in EC2 instances.

There has been speculation that Graviton will be as robust as Intel’s Xeon processors, but the analysts don’t see that as a threat to the semiconductor giant. “It’s a rounding error in the grand scheme of the market,” Vellante said. “I would not say Intel is in trouble, and it continues to be the dominant player in the data center. Intel is massive, and they do a huge amount of business with the cloud players.”

In addition to speculation surrounding Amazon’s foray into the chip business, additional news out of Las Vegas has focused on the company’s introduction of four new services for its IoT portfolio. “I really like what Amazon is doing with IoT,” Furrier said. “They’re going to serve the operations technology people with a software development platform that’s secure and fully managed. It allows them to build applications for IoT, and I think it’s the right approach.”

In his keynote address on Thursday, AWS Chief Technology Officer Werner Vogels took a jab at Oracle Corp. by recounting the exact day Amazon shut down its Oracle data warehouse and migrated to Redshift and calling that day his best of this year. It was a lesson, recently articulated by former Cisco Systems Inc. CEO John Chambers, that entitlement in the tech industry doesn’t last forever.

“Oracle absolutely acts as if they are entitled, and they’re bunkering down into their red stack,” Vellante said. “I’ve often said, don’t bet against (Oracle founder) Larry Ellison. But his total addressable market is confined to Oracle customers.”

Here’s the complete video analysis, part of SiliconANGLE’s and theCUBE’s coverage of AWS re:Invent.

Photo: AWS