Less than two weeks after rolling back one of its most ambitious artificial intelligence projects — a cashierless checkout technology called Just Walk Out — Amazon CEO Andy Jassy said in an annual shareholder letter published Thursday that he’s confident the future of the company’s biggest breakthroughs for customers will come from generative AI.
Jassy acknowledged the project’s stall, but underscored his belief in generative AI’s transformative potential. “Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the internet,” he wrote.
“While Amazon has widely been viewed by consumers and the market as falling behind on AI, Jassy said in his letter that he’s “optimistic that much of this world-changing AI will be built on top of AWS, the company’s cloud computing business that many of the world’s digital businesses already rely on to run.”
Jassy outlined Amazon’s strategy on generative AI, explaining that the company is less focused on building consumer-facing applications to compete directly with popular tools like OpenAI’s ChatGPT. Instead, Amazon is concentrating on constructing the underlying “foundational” AI models and selling them to enterprise customers. These customers already include major companies such as Delta Air Lines, Siemens, and Pfizer.
Amazon’s continued investment in AI will focus on its integration into core functionalities across various products and services. This includes the introduction of Rufus, its AI-powered shopping companion and the company’s virtual assistant, Alexa, which Jassy anticipates will become increasingly intelligent with ongoing development.
Generative AI, a subset of machine learning powered by ultra-large ML models, has been gaining attention. It has the potential to profoundly impact various industries, from healthcare and life sciences to media, entertainment, education, and financial services. Amazon has invested heavily in generative AI, recently investing an additional $2.75 billion, bringing its total investment to $4 billion in start-up Anthropic.
As part of the deal, Anthropic will run on Amazon Web Services (AWS), and Amazon will be able to offer its enterprise customers access to Anthropic’s Claude, one of the leading generative AI models. Amazon has also added AI expert Andrew Ng, a highly respected AI pioneer and the former chief scientist at Chinese internet company Baidu, to its board.
Amazon has announced several generative AI services and capabilities, including Amazon Bedrock, a new service for building and scaling generative AI applications. Amazon Bedrock gives customers easy access to foundation models from the top AI startup model providers, including AI21, Anthropic, and Stability AI.
While Amazon is clearly seeking a path toward dominating the AI space, it has struggled so far to create consumer-facing products that resonate with customers.
Amazon faces competition from established players like Google and Microsoft, as well as smaller, fast-moving startups. While Amazon possesses a robust cloud infrastructure – Amazon Web Services (AWS) – a critical element for training and running powerful AI models, some analysts remain skeptical about the company’s ability to catch up in the generative AI race.
While AWS is likely to remain a major player in providing the computational muscle for AI development, translating that into successful consumer-facing applications presents a different challenge. However, with its strategic investments and developments in AI, Amazon is poised to make significant contributions to the current status of AI.
