Every November, Amazon.Com, Inc (NASDAQ: AMZN) Amazon Web Services (AWS) hosts re: Invent, a significant trade show in Las Vegas, attracting thousands of software developers and tech executives.
Traditionally, this event showcased the cloud-computing revolution led by Amazon, with AWS executives urging attendees to switch from traditional servers to Amazon's cloud services. AWS's success has been remarkable, and it is on track to earn $90 billion this year, a testament to its dominance in the field, Bloomberg reports.
However, the emergence of generative artificial intelligence (AI) marked a turning point. In November 2022, OpenAI released ChatGPT, demonstrating the potential of AI to generate text, images, and video.
Microsoft Corp (NASDAQ: MSFT), in partnership with OpenAI, integrated AI into its products, including cloud-computing services. Similarly, Alphabet Inc's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google began incorporating generative AI into its offerings. Amazon's initial attempts in this field seemed less developed in comparison.
At the 2023 re: Invent, AI was a central focus in Amazon's presentations and product launches. AWS chief Adam Selipsky shared the stage with leaders from Nvidia Corp (NASDAQ: NVDA) and Anthropic, highlighting Amazon's significant investment in AI, including foundational models and a workplace chatbot.
This shift indicates Amazon's urgency to remain competitive in the rapidly evolving cloud and AI market.
While AWS is still a default choice for many companies modernizing their infrastructure, the rise of generative AI represents a challenge.
To stay relevant, AWS must excel in this area, as JB McGinnis of Deloitte noted.
At a re: Invent event, AWS showcased a more humble approach, seeking feedback from startup founders on improving their services.
This change in demeanor reflects AWS's recognition of the need to actively compete in a market where companies like Google are also making significant strides.
Amazon stock has gained over 79% year-to-date, while Microsoft has gained 56%.
Price Action: AMZN shares are trading lower by 0.25% at $153.45 on the last check Friday.