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When Wall Street frowned on Amazon’s slowing cloud business revenue, CEO Andy Jassy sent a clear message to investors.
Jassy said on Amazon’s first quarter earnings call on Thursday:
Artificial intelligence has become a business buzzword, with companies touting AI in everything from improving Internet searches to making music. The so-called large language models underlying certain of his AI products require enormous computing power. Amazon hopes new AI companies will choose to build their products on his AWS cloud services.
“Frankly, models weren’t all that attractive until about the age of six. [to] “It offers a truly amazing opportunity,” Jassy said.
The value of scarce computing power fueling the AI boom has long been noted, with Oracle chairman Larry Ellison saying on the March earnings call, there is demand,” he said.
But predictions of future AI bonanza weren’t enough to appease Amazon investors worried about the near-term health of AWS’ business. Amazon’s stock initially rose more than 9% in long-term trading. Investors were moved by the Internet retail giant’s better-than-expected earnings. but, Returned Observer above Slowdown in cloud business growththe stock reversed course and fell 2%.
Amazon executives talked about AI during the call, but also confirmed that AWS revenue is expected to grow by 11% so far in April. Around the same time last year he saw a significant slowdown in his 37% growth AWS produced.
According to Zion Market Research, the AI market will be valued at approximately $59.67 billion in 2021 and is estimated to grow to a whopping $422.37 billion by 2028.
Amazon’s ambition to become AI’s go-to cloud provider could face stiff competition from cloud rivals Microsoft and Google, which have strong cloud services businesses and are expanding AI’s influence. Google has developed much of his LLM on its own, and Microsoft has invested his $13 billion in OpenAI, the maker of his ChatGPT.
Amazon is also developing its own AI, using its own large-scale language model called “Titan.” The company recently announced a new privacy-focused AI cloud service called “Bedrock.” This is intended for businesses that are wary of providing their own data to LLMs operated by other companies.
“So many customer experiences that never existed before will be reinvented and invented,” Amazon CFO Brian Olsavsky said on a conference call Thursday, referring to AI.
