The chip company Amazon bought for $350 million has a new product that could terrify Intel

Jeff Bezos

Mike Segar/Reuters

Amazon Founder and CEO Jeff Bezos

Annapurna Labs, the chip designer Amazon reportedly bought for $350 million last year, announced on Wednesday that it's released a new line of chips called Alpine.

The ARM-based chip can run WiFi routers, power connected devices, and handle networking and storage functions for data centers, it said in a press release.
Although this is Amazon's first major move in the chipmaking business, it could potentially take it deeper into the chip market, posing a threat to Intel down the road.
Intel is the de facto market leader in both the PC and data center chips. But Amazon has a growing presence in the cloud computing market and public data centers, which gives it stronger leverage over Intel. Amazon currently uses custom chips made by Intel, but the new Annapurnar chips based on ARM chip designs show it could potentially move away from Intel's products.

Amazon's new Annapurna chips might not be an immediate threat to Intel - yet. Bloomberg reports that they are more geared towards the low-power servers and computers, as opposed to the high-end market Intel traditionally goes after. Plus, Intel already owns nearly 96% of the data center market, so it's hard to see Amazon's new chip putting a serious dent on its business any time soon.

Intel wasn't immediately available for comment, but when we spoke to Diane Bryant, Intel's data center boss, in November, she shrugged it off as merely one of the many comeptitors.

"When you have 97% share of the market, you're always looking for where the competition may come in," Bryant said. "As long as I can give the cloud service providers the best technology, I believe [customers] will continue to rely on us based on the investment that we make."

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.