The generative artificial intelligence arms race has so far been largely contained between Google and Microsoft, with each tapping A.I. in hopes of edging out their rival in search and virtual office tools. But the sky’s the limit for A.I.’s potential applications as companies and investors pour billions into the technology, and Amazon is the latest tech giant to throw its hat into the A.I. ring.
Last year’s successful launch of OpenAI’s ChatGPT, which became the fastest-growing app in history when it hit 100 million users in only two months, showcased the technology’s lucrative potential and spurred companies into action. In addition to Google and Microsoft, Meta, Twitter, and Salesforce have all announced investments in generative A.I., even as the same companies choose to cut back on expenses and employees elsewhere.
Not one to be left out, e-commerce giant Amazon is poised to make its own big A.I. play, CEO Andy Jassy announced in a letter to shareholders Thursday, launching its own in-house A.I. model known as Titan as well as big updates to enhance the company’s cloud services, an area in which Amazon is already a world leader.
Generative A.I. and the large language models (LLMs) that power it are “core to setting Amazon up to invent in every area of our business for many decades to come,” Jassy wrote in the letter. The company is developing its own LLMs—deep learning algorithms trained on troves of data to predict and generate words or images based on an input—to enhance Amazon Web Services (AWS), a pay-as-you-go cloud computing platform where companies pick and choose the services they want. Users can tap A.I. tools to simplify their AWS, while Amazon is also developing bespoke chips users can tap to craft their own LLMs to assist with operations.
Jassy said the company will continue to “invest substantially” in A.I. models across multiple services, including for consumers, sellers, brands, and creators, adding that the technology would “transform and improve virtually every customer experience.”
“I could write an entire letter on LLMs and Generative A.I. as I think they will be that transformative, but I’ll leave that for a future letter. Let’s just say that LLMs and Generative A.I. are going to be a big deal for customers, our shareholders, and Amazon,” he said.
Amazon executives went into more detail Thursday as to how the company was set to integrate A.I. with its services. Amazon also introduced Bedrock, a new service that allows AWS users to tap well-known A.I. models including from generative A.I. developer Anthropic and the text-to-image generator Stability AI. Amazon is also launching its own LLM, Titan, which can perform functions similar to ChatGPT and act like a virtual office tool.
While Amazon already has its own patented A.I. projects—such as CodeWhisperer, an A.I.-powered code generator—its take on the A.I. race is different from the more cutthroat stance of other tech companies, who have invested billions in their own projects and A.I. startups to gain a proprietary edge over competitors. With services like Bedrock, Amazon is looking to become a “neutral platform,” according to a Wall Street Journal report Thursday, where companies who want to integrate their business with A.I. can come and pick what suits them best.
“We believe that customers are going to need a lot of different generative A.I. models for different purposes, and it is unlikely that any one model is going to serve all customers or even all the needs of one customer,” Adam Selipsky, CEO of AWS, told the Journal.
Jassy explained the neutral platform concept further in an interview with CNBC Thursday, where he said that Bedrock could fill an important niche by allowing companies to access ready-made and proven A.I. models without having to develop their own.
“Most companies want to use these large language models, but the really good ones take billions of dollars to train and many years, and most companies don’t want to go through that,” he said.
But while Amazon’s approach to the A.I. race may be tamer than the at-times fast and furious one being employed at Google and Microsoft, the e-commerce giant still has a major stake in getting A.I. right if it wants to maintain a lead in cloud services. AWS is Amazon’s biggest source of revenue by a large margin, accounting for 14% of the company’s total revenue in the fourth quarter of 2022, with the subsidiary’s growth outpacing that of its parent company.
AWS remains well ahead of competitors Microsoft and Google in the cloud services department, but that lead is starting to shrink. AWS’s market share fell from 40.8% in 2020 to 38.9% in 2021, according to the most recent data from Gartner, a tech sector research firm, while Google and Microsoft clawed back some of the difference. Microsoft, which is developing new A.I. technologies with OpenAI to improve its own cloud services platform, Azure, is Amazon’s closest competitor, with its market share growing from 19.7% to 21.1% over the same period.
