Currently, Amazon is allocating more investment into cloud services and artificial intelligence (AI) than its traditional e-commerce operations. This shift is anticipated to intensify in the future, marking a significant transformation for the Seattle-based company.
Massive investments in the coming years
Last week, Amazon hit a $2 trillion market capitalization milestone, becoming the fifth American company to do so. The company is ramping up its focus on artificial intelligence (AI), highlighted by a $4 billion investment in Anthropic, which operates the Claude.AI chatbot, over the past two years.
Despite these efforts, some experts note Amazon’s AI development lags behind other tech giants. To address this, Amazon plans to invest over $100 billion in data centers over the next decade, critical for training large language models (LLMs). This initiative has drawn attention in France.
CEO Andy Jassy views generative AI as Amazon’s fourth growth pillar after e-commerce, Prime, and Amazon Web Services (AWS). AWS saw a significant boost in Q1 2024, with a 17% revenue increase year-over-year, driven largely by AI integration into its cloud services.
Amazon’s new leadership reflects its strategy
Andy Jassy’s ascension to CEO at Amazon highlighted the critical roles of cloud and AI, reflecting his tenure at AWS. Recently, Matt Garman, a seasoned executive with strong engineering acumen, was appointed AWS CEO to advance AI utilization.
“It’s a fascinating time to be here and think about how we can really think differently about how IT works and customer services in the world of generative AI,”
John Felton, AWS’s chief financial officer, told the Wall Street Journal
This shift towards artificial intelligence doesn’t mean Amazon is sidelining its e-commerce and logistics operations. Known for injecting billions during crucial times like the COVID-19 pandemic, Amazon’s strategy now extends with equal vigor into AI.