Tesla GK110 K20 3Qtr NCovr Amazon Orders More than 10,000 Nvidia Tesla K10 Cards, K20s to Follow?

There's no doubt that GPGPU or GPU Computing is becoming a big business. After speaking with sources close to the company, we learned that NVIDIA scored a great deal with Amazon for its Amazon Web Services (AWS).

At the recently held Intel Developers Forum, we heard quite a few pro et contra arguments for and against the GPU Computing, which is being touted by AMD, Nvidia, Qualcomm and Vivante – and obviously pushed back by Intel. Intel wants to sell you as much of its own kit (as expected), from Xeons to Xeon Phi and Itanium.

However, we managed to learn that Amazon, one of leading if not the leading provider of online services made its bed and decided to go with Nvidia, ordering around 10,000 boards for their Elastic Computer Cloud (EC2). More precisely, for the "HPC on Amazon EC2". If our sources got their facts straight, the Amazon negotiated quite the deal for the company, but don’t worry – Nvidia is far from being unhappy with the deal. One of probable reasons why Kepler GPU (GK104) and especially GTX 690 are in the short supply could be in the order of this size. Amazon did not care about performance with double precision data, keeping in line that they want as much single precision compute power as possible. The selected GPGPU board is none other than Tesla K10, which pairs two GK104 GPUs with 8GB of GDDR5 memory (4GB per chip). One interesting note is that Amazon's boards look a bit different from the official picture, which we show below:

NVDA TeslaK10Board Amazon Orders More than 10,000 Nvidia Tesla K10 Cards, K20s to Follow?

Those 10,000+ boards translate into around 20,000 GPUs, paired with 80TB of GDDR5 memory. If that doesn't say to Samsung and other memory vendors that we need higher density ultra-fast memory, not sure what will. The K10 retails for $4,999 but you can find it for as low as $3,399,99. Naturally, if you're ordering a massive volume deal, the price will come down significantly, and you'll still make money.

According to stories circulating around IDF, Nvidia did not exactly pass as bad as Intel did with their Xeon Phi boards, which went for pathetic $400 per card (300W, 61-core, 8GB GDDR5). Amazon's tough negotiating stance did drive the price down. While we expected that the boards would be discounted down from $4,999 from $2,499 to $2,999 range, truth was a little bit different. Amazon allegedly paid as low as $1,499 to $1,799 per card, bringing a value of the order between 15 and 18 million U.S. dollars. However, that is not all.

If you did not know, Tesla comes with an interesting subscription warranty program, which sets the customer back for additional $500 per board per year. That money guarantees immediate replacement should the board fail. Our sources implied that the company took that option in a heartbeat, expecting to pay around $1000 to $1,500 per board (2-3y lifespan). However, should Maxwell turn in early 2014 and be better than two GK104 GPUs combined, we were told that an "immediate replacement" could be in order. All in all, with this one deal, Nvidia should net between 25 and 28 million U.S. dollars from a single customer. Tesla is growing up as a business, that is without any doubt.

Furthermore, Amazon also seeks Double Precision performance for specific set of users that insist on such features, bringing the Tesla K20 6GB into the fold. The K20 comes at a much lower starting price of $3199, but we were told that the allocation is already sold out and that Amazon cannot get a much better deal. In fact, some of the volume deals were even signed close to MSRP – such is the demand.

Naturally, the success of GK104 die in the HPC space and the limited supply from TSMC have another consequence – potential shortage in the consumer segment.