Amazon (AMZN) continues to solidify its position in the cloud computing sector through its expanding generative AI initiatives. The tech giant recently announced a $4 billion investment to acquire a minority stake in Anthropic, a rival to its OpenAI. Anthropic has chosen Amazon Web Services (AWS) as its primary cloud provider to accelerate the development of its future foundation models (FM).
Amazon will utilize AWS Trainium and Inferentia chips to assist Anthropic in building, training, and deploying these FMs, which power applications like chatbots. This strategic collaboration is expected to enhance the generative AI capabilities available to Amazon customers through Amazon Bedrock.
Growing Generative AI Efforts
Amazon’s investment in Anthropic signifies its commitment to expanding its presence in the thriving generative AI market. This move enables Amazon developers and engineers to leverage generative AI technology in building and improving applications.
In addition to the Anthropic investment, Amazon recently launched the AWS Generative AI Innovation Center program. This program facilitates connections between customers and AI experts from AWS and the AWS Partner Network, offering guidance and support for developing and implementing generative AI solutions.
These efforts are aligned with the significant growth projected for the generative AI market. According to Bloomberg, the market is expected to reach $1.3 trillion by 2032, with a compounded annual growth rate (CAGR) of 42% from 2022 to 2033. Allied Market Research estimates that the global generative AI market will be valued at $191.8 billion by 2032, with a CAGR of 34.1% from 2023 to 2032.
Investors are likely to be optimistic about Amazon’s prospects in this market, considering the company’s year-to-date return of 51.5%. With a Zacks Rank #1 (Strong Buy), Amazon is positioning itself as a major player in the generative AI space.
Amazon’s investment in Anthropic puts it in direct competition with Microsoft (MSFT), which has also made substantial investments in OpenAI. Microsoft has integrated OpenAI’s next-generation Large Language Models (LLM) into its search engine Bing and browser Edge, offering users a ChatGPT-like experience.
Other competitors in the generative AI market, such as Google (GOOGL) and Adobe (ADBE), are also leveraging AI technology to capitalize on market opportunities. Google recently introduced its chatbot Bard and launched consulting services to assist clients in adopting generative AI techniques. Adobe has announced the commercial release of its family of creative generative AI models, Firefly.
This diverse competition underscores the escalating significance of generative AI and the race among tech giants to harness its potential.