In a bid to stay competitive with Microsoft and Google, AWS (Amazon Web Services) is committing $100 million to establish a generative AI center.

 

Amazon Web Services CEO Adam Selipsky speaks at the CERAWeek by S&P Global conference in Houston on March 7, 2023.

F. Carter Smith | Bloomberg | Getty Images

Amazon's cloud unit, AWS, has announced a $100 million investment in a center dedicated to helping companies utilize generative artificial intelligence (AI). This move comes in response to the growing significance of generative AI, particularly after the introduction of OpenAI's ChatGPT chatbot. While the investment may seem small for a company with substantial resources, it reflects AWS's recognition of the current state of generative AI and the need to stay competitive alongside rivals such as Microsoft and Google.

In an interview with CNBC, AWS CEO Adam Selipsky compared the investment to a race, emphasizing the importance of being among the frontrunners in the evolving field of generative AI. As part of this initiative, Amazon plans to hire data scientists, engineers, and solutions architects. The center is already collaborating with companies like Highspot, Twilio, RyanAir, and Lonely Planet. According to CNBC, the center is more of a program than a physical entity.

Although Amazon dominates the cloud infrastructure market, Microsoft and Google have made notable strides in generative AI. While Amazon has leveraged AI for years through applications like shopping recommendations and Alexa, its competitors have made substantial investments in this area. For instance, Microsoft has forged a multilayered alliance with OpenAI, while Google is rapidly deploying its in-house AI tools for consumers and businesses.

Despite not having the first widely adopted large language model for chatbots or document summarization, Selipsky expressed confidence, citing Amazon's customer-centric approach and its history of building what customers want. However, one challenge Amazon currently faces is meeting the demand for AI chips. The company has started developing its own chips in addition to using Nvidia's graphics processing units, but both companies are working to increase supply.

Selipsky also acknowledged a slowdown in customer spending on the cloud, driven by ongoing economic uncertainty. While some customers have completed their cost optimization efforts, others are still in the midst of the process. Selipsky believes that AI remains a significant trend, with Amazon's Bedrock generative AI service, Titan models, and the new innovation center positioning the company at the forefront of this wave of innovation.

According to Selipsky, generative AI is the next big thing that will drive more customers to adopt cloud services, and AWS is well-equipped to offer credible generative AI solutions. He highlighted enterprise security as a critical factor, mentioning instances where Fortune 500 companies banned ChatGPT due to initial concerns about security.