AI: Amazon in the AI race too. RTZ #324

...also ramping up to take their share

Amazon along with Apple are likely the least appreciated for their opportunities in the AI Tech Wave, amongst the ‘Magnificent 7’ big tech companies. But as I’ve outlined several times, Amazon is well positioned to take their share of AI growth opportunities as well, especially in Enterprise cloud services.

Especially with Amazon AWS, the leading cloud data center company that’s well ahead of Microsoft Axure (exclusively offering OpenAI’s GPT and ChatGPT products), as well as Google Cloud, Oracle Cloud, and a host of other companies. Not to mention of course Nvidia’s DGX AI data center strategy that spans across the cloud data center companies listed above.

All this is timely given Amazon CEO carrying on the annual ‘Letter to shareholders’ tradition laid down for years by founder and former CEO Jeff Bezos. As the WSJ highlights in “Amazon CEO Touts AI Revolution While Committing to Cost Cuts”:

“In his letter to shareholders, Andy Jassy says generative AI could usher in the largest tech transformation since the Internet.”

“CEO Andy Jassy said generative artificial intelligence could be one of the largest technological transformations in decades. “

“In his annual letter to shareholders, Jassy laid out a vision for how generative AI could be a critical building block in establishing the company’s next pillar of growth following its online retail Marketplace, Amazon Prime and its cloud-computing unit Amazon Web Services.”

“Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet,” Jassy wrote in his letter Thursday. “This GenAI revolution will be built from the start on top of the cloud. The amount of societal and business benefit from the solutions that will be possible will astound us all.”

“Jassy’s annual shareholder letter, his third since he took over as CEO, follows a longstanding tradition set by Amazon founder Jeff Bezos, who as CEO of Amazon for 27 years released annual letters that were studied across the tech industry and beyond. Bezos, who stepped down as Amazon CEO in 2021, typically used the letters to speak about Amazon’s accomplishments and ambitions and wrote them with storytelling flair. “

As I outlined last year, Amazon has built it’s ‘Flywheel’ loop driven business in not one but at least four major businesses in its two plus decade under Jeff Bezos.

With Amazon AWS taking its place alongside Amazon’s ecommerce business, Amazon Prime subscription service (modeled after Costco’s industry-leading subscription retail model), and of course Amazon’s third-party reseller business, which is one of the reasons for the government’s antitrust suit and other actions against the company. One could of course add the burgeoning close to $40 billion advertising business, and one can see that the almost $2 trillion market cap company has a string of successes to build on.

Amazon’s accomplishments over the decades remains a model for ‘AI native’ companies like OpenAI going forward, as I’ve outlined in an earlier piece. Especially given the exponentially powerful ‘reinforcement learning loops’ that can drive down costs and prices at scale for AI customers as it did for Amazon customers across its businesses.

Amazon’s investments of late in Foundation LLM AI companies like Anthropic, along with its partnerships with AI companies like Nvidia, portend well for Amazon AWS getting its share of the AI infrastructure market going forward. They’re not the only ones going slow and steady in the AI race. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)