Low prices. A wide selection. Convenience that’s hard to beat.
These have been key keys to Amazon’s e-commerce dominance over the past two decades.
Now, the tech titan appears to be doubling down on this winning playbook by borrowing parts of it to launch a new AI strategy from its a division of Amazon Web Services which is partly aimed at low prices and a wide selection.
To be clear, it will take some time before the business world can judge the effectiveness and financial viability of Amazon’s approach. But if successful, the game plan would go a long way toward silencing critics who argue that Amazon is playing catch-up in the AI wars, while also securing the company’s position as one of the world’s most powerful and influential tech corporations for decades to come.
Amazon executives unveiled key pieces of its AI strategy at its flagship AWS Re:Invent conference in Las Vegas this week. One of the key elements is the new portfolio of internal foundation models, known as FM or LLM, named Newwhich can handle text, image and video queries.
The introduction of a new class of Amazon’s own AI models might, at first glance, be confusing because the company already is invested $8 billion in Anthropicmanufacturer of the popular Claude family of Gen AI models. But, as my colleague Sharon Goldman recently notedAmazon is betting that “there will never be one tool” — or AI model — that will rule them all. In short, Amazon believes businesses will want a choice of models, whether it’s Amazon, Anthropic or other tech giants like Meta.
Amazon actually started pushing this idea of offering a choice of AI models through a single API to business users when its AWS division first introduced a service called Amazon Bedrock last year. Through Bedrock, enterprise customers could choose from a relatively limited selection of AI models – but still a choice – to train for their own needs and serve as the foundation for their own Gen AI applications.
On Wednesday, Amazon doubled down on the strategy by announcing Bedrock Marketplace, which offers a total of 100 AI models. LLMs on the market come from many different companies, some of which are designed for specialized purposes.
“(F)inding and evaluating these models can be challenging and expensive,” Amazon said in its blog post announcing the market. “You have to expose them in different services, build abstractions to use them in your applications, and create complex security and management layers. Amazon Bedrock Marketplace addresses these challenges by providing a single interface to access specialized and general-purpose (foundation models).”
Looking back at Amazon’s e-commerce business, the core part is the Amazon Marketplace, where hundreds of thousands external traders list products for sale, which make up 60 percent of all goods sold through Amazon. Amazon supplements the selection of these marketplaces by selling its own inventory of goods, including some under its own brand names when a particular product category or price point is not met by marketplace sellers or Amazon’s brand partners.
Similarly, Amazon offers businesses an AI version of the marketplace that one can imagine will only expand in the future. (It’s also worth noting that Amazon’s core AWS business offers a marketplace of more than 10,000 software tools covering categories from cybersecurity to data analytics.)
Low prices are also another hallmark of Amazon’s retail business. Amazon is aggressively matching prices with other retailers and hosting two events with huge discounts that attract heavy spending and new customers. (The FTC alleged in its antitrust lawsuit against Amazon that the e-commerce giant artificially inflates consumer prices on the Web by penalizing retailers who sell products at a lower price at other retailers, but that’s a topic for another day.)
And sure, Amazon CEO Andy JassyThe slide deck revealing the new Nova AI models started with the price. “75% more profitable,” was the first feature called for.
Simon Willison, an independent AI researcher, ran a quick test and agreed, writing on social media app BlueSky that Amazon’s “price and performance (are) competitive Google The Gemini family, which means they are _really_ cheap.”
“With this release, I think Amazon has earned its place among the leading model suppliers,” Willison added. “Maybe we need a new FAANG acronym covering OpenAI, Anthropic, Google, Meta and Amazon. I like GAMOA.”
Amazon executives won’t care what the new acronym is called as long as it deserves a place in it. If they do, the company’s longstanding hallmarks of low prices and selection are likely to be key reasons.
Are you a current or former Amazon or AWS employee with thoughts on this topic or advice to share? Contact Jason Del Rey at [email protected], [email protected]or via the messaging apps Signal and WhatsApp at 917-655-4267. You can also send him a message is LinkedIn or on @delrey on X.
