"For nearly two decades, Amazon Web Services (AWS) has been the company's profit engine. But in the next five years, its role could become even more strategic. AWS isn't just selling cloud storage anymore. It's becoming an AI infrastructure layer for enterprises -- offering chips like Trainium and Inferentia, as well as services like Bedrock that enable developers to build generative AI applications using Amazon's in-house models or others, such as Anthropic's Claude."
"This approach is a smart move, as the company is already a cloud storage supplier to many leading companies. Extending the AI tools to them is a natural step that helps grow revenue and improve customer stickiness. Moreover, many of its customers are working diligently to develop next-generation AI applications for consumers, so these future winners will naturally rely on AWS to power their computing and storage needs."
Amazon's retail business is maturing while cloud, advertising, and artificial intelligence are becoming the company's primary growth engines. AWS is transforming from a storage and compute provider into an AI infrastructure layer offering custom chips and services like Bedrock to run generative AI models. Embedding AI across enterprise customers increases revenue and stickiness and positions AWS to power emerging consumer AI applications. Advertising leverages Amazon's commerce data to create a scalable, high-margin revenue stream. The convergence of cloud, ads, and AI could reshape Amazon's economic model and competitive edge over the next five years.
Read at The Motley Fool
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