According to Trip Chowdhry, a Global Equities Research analyst, Wal-Mart Stores Inc (NYSE:WMT) is setting up its own data centers which are based on the cloud and will consequently use more NVIDIA Corporation (NASDAQ:NVDA) chips in the future. The retail giant will now be joining providers of cloud computing services such as Amazon.com, Inc. (NASDAQ:AMZN) Web Services which are increasingly turning to graphical processing units in machine learning data crunching.
Graphical processing units are considered better suited with regards to controlling autonomous cars or analyzing data sets compared to general-purpose chips utilized in traditional computing.
Deep neural networks
In the course of the next half a year, Chowdhry predicts that Walmart will use Nvidia chips for its deep neural networks. These neural networks are advanced computing systems which mimic how the human mind learns.
According to Chowdhry a graphical processing units farm will be built by Walmart and will be around a tenth of a similar GPU farm built by online retail giant Amazon. This will be beneficial to Nvidia’s revenues as it will mean more sales of graphical processing units. Nvidia is already counting on the growth in deep learning to accelerate its next phase of growth.
Having seen Amazon eat into its market share, Walmart is loathe to use the services of Amazon Web Services and would prefer alternative solutions including its own. This is the reasoning behind Walmart developing OneOps Cloud which will not only serve its own needs but will be available for hire to other business organizations.
“Within the next 6 months or so, Walmart is going full steam with DNN (Deep Neural Networks) and will be creating its own NVDA GPU Clusters on Walmart Cloud,” wrote Chowdhry.
Amazon Web Services
Three months ago reports emerged suggesting that some technology customers of Walmart had been asked by the giant retailer to quit Amazon Web Services.
Walmart is not the only retailer using Amazon Web Services as Target Corporation (NYSE:TGT) has done that, too. A report by CNBC has indicated that Target’s use of Amazon Web Services is being scaled back. According to a spokesperson for Target, the retailer has been using and will keep on using cloud services from multiple providers.
On Friday shares of Wal-Mart Stores Inc rose by 0.38% to close at $78.37.