Amazon is heavily investing in artificial intelligence, with capital expenditure expected to exceed $100 billion this year, primarily aimed at bolstering AWS AI infrastructure. This commitment underscores Amazon's determination to maintain its leadership in the AI ecosystem. AWS is a leading cloud platform that enables companies to develop AI applications without needing their own infrastructure.
Despite these significant investments, the stock market's response has been lukewarm. While analysts acknowledge Amazon's clear path to AI monetisation through AWS, some have lowered their price targets. Concerns linger about whether Amazon can effectively convert its vast customer data into generative AI opportunities. Amazon is developing its own Trainium processors to offer customers compelling price-performance options.
CEO Andy Jassy has called AI a 'once-in-a-lifetime reinvention', and the company anticipates that AI infrastructure pricing will decrease as more chip options become available. Amazon expects inference to become the biggest driver of AI costs in the future, compared to model training today.
