Amazon.com, Inc. (NASDAQ: $AMZN) is the largest online retailer and technology provider in numerous sectors, including cloud computing, online advertising, digital streaming, and artificial intelligence.
Amazon is making a bold move to cement its position as a leader in the rapidly evolving field of AI. CEO Andy Jassy declared that generative AI could be one of the biggest technological transformations in decades, and the tech giant has made significant investments to stay at the forefront of this revolution.
Amazon’s most recent AI ambition is the addition of Andrew Ng, a renowned AI expert, to its board of directors. Ng’s appointment comes as the company parts ways with long-time board member Judy McGrath, the former CEO of MTV. This change in Amazon’s board signals a clear shift in the company’s priorities, with a greater focus on advancing its AI capabilities.
Catching Up to the Competition
Amazon has long been a player in the AI space with its Alexa assistant, autonomous delivery services, and machine learning-powered product recommendations. However, the company has faced the perception that it has been “falling behind” in the AI race, especially in the wake of the rapid advancements made by OpenAI’s GPT language models.
Ng’s appointment is a strategic move to bolster Amazon’s AI expertise and help the company catch up to its competitors. As the chief scientist at Baidu and the founder of Google Brain, Ng has a proven track record of driving innovation in AI. His expertise in areas like computer vision, natural language processing, and machine learning could prove invaluable as Amazon looks to develop its own world-changing AI applications.
Investing in the Future of AI
In 2023, Amazon invested $4 billion in the AI startup Anthropic, underscoring its belief in the potential of generative AI. The company is also working to expand its AWS cloud computing business to offer a broader range of AI services, including the ability to train and deploy large language models that can reach beyond 1 trillion parameters.
Amazon has deepened its collaboration with NVIDIA to leverage the tech giant’s latest GPU technology, including the new NVIDIA Blackwell platform, to accelerate the development and deployment of these powerful AI models. By combining NVIDIA’s hardware with Amazon’s cloud infrastructure and security features, the companies aim to provide customers with unparalleled computing power and data protection for their AI applications.
Amazon’s Robotic Transformation
Amazon’s AI transformation extends beyond just software and cloud services. The company has also been rapidly expanding its use of robotics in its warehouses and fulfillment centers, highlighting the growing role of automation in its operations.
As of 2024, Amazon has deployed over 750,000 robots, a dramatic increase from the 200,000 robots it had in 2019. This massive investment in robotics has reduced the company’s human workforce, with the number of employees declining by over 100,000 since 2021.
While Amazon emphasizes that integrating robots improves efficiency, safety, and delivery speed, the shift toward automation raises concerns regarding human labor within the company. The broader implications of this trend for Amazon and the wider economy will be an area to watch closely in the coming years.
Navigating the Challenges Ahead
As Amazon continues to transform itself through the power of AI and automation, the company will need to navigate a complex and ever-evolving landscape. Concerns about job displacement, data privacy, and the ethical use of AI will be key issues that the company will need to address.
The AI race is intensifying, with companies like Microsoft, Google, and OpenAI vying for dominance. Amazon’s ability to stay ahead of the competition and deliver innovative, world-changing AI applications will be critical to its long-term success.
Its bold moves and strategic investments in AI and robotics demonstrate its commitment to shaping the future of technology. As Andy Jassy has stated, the potential of generative AI to revolutionize various industries is immense, and Amazon is positioning itself at the forefront of this transformation.
Amazon Stock Performance
After nearly three years, AMZN shares achieved a new record close of $189.05 on Thursday, April 11, 2024, a 1.67% increase, surpassing its previous record closing price of $186.57, set on July 8, 2021. The stock has come close to achieving this record in recent days, rising above its previous record, closing on April 8 and 9, but falling short of the record.
On April 3, Amazon achieved a new all-time high market capitalization, made possible by the split-adjusted increase in share count since its previous market cap high. The stock is now on track to achieve a new record market cap of $2 trillion after closing with a $1.96 trillion market on Thursday.
Year to date, the stock is up 26.09%, following a gain of over 80% in 2023. In the past 52 weeks, the stock is up 81.69% compared to the 24.47% gain of the SPX.
Is Now the Time to Invest in Amazon?
Amazon’s strategic focus on generative AI and continued investment in robotics and automation suggest the company is well-positioned for long-term growth. The addition of renowned AI expert Andrew Ng to the board and Amazon’s collaboration with NVIDIA further underscore its commitment to innovation. AMZN shares’ upward trajectory signals that the company’s strategic initiatives resonate with investors.
With the current strong performance, Amazon appears poised to continue its upward trend and potentially surpass its new all-time high, further consolidating its position as a dominant force in the tech industry.
While concerns around job displacement and data privacy loom, Amazon’s ability to navigate these challenges could pay dividends for investors. With the stock approaching new all-time highs and the company’s ambitious plans for the future, Amazon may be a compelling investment opportunity in 2024 for those bullish on the tech giant’s transformative potential.
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