Amazon.com to Finance $100 Million in New AWS AI Center

June 26, 2023: On Thursday, Amazon’s cloud unit said it’s assigning $100 million for a center to help companies use generative artificial intelligence, the technology that’s taken off in the months since OpenAI unleashed its ChatGPT chatbot on the public.

It’s a small investment for a company with $64 billion in cash and half a trillion dollars a year in operating expenses. But the announcement shows that Amazon Web Services recognizes the significance of the current moment in generative A.I. and the importance of being in the conversation alongside competitors Microsoft and Google.

As part of the latest announcement, Amazon said it would add some data scientists, engineers, and solutions architects to the payroll. AWS said the center is already working with two customers, Highspot and Twilio. The company said it’s a “program” rather than a physical center.

Amazon, which beat Microsoft and Google to the business of renting out servers and data storage to companies and other organizations, enjoys a commanding lead in the cloud infrastructure market. However, those rivals have had splashier entrances into generative A.I., even though Amazon has outlined broadly on A.I. for years to show shopping recommendations and operate its Alexa voice assistant.

Microsoft has been spending billions on a multilayered alliance with OpenAI, and Google is shifting quickly to deploy A.I. tools it’s built in-house for consumers and businesses.

Amazon has yet to have the first popular large language model enabling a chatbot or a tool for summarizing documents.

Selipsky said he wasn’t concerned. He joined the company in 2005, a year before the launch of AWS’ core services for computing and storage. Quoting Amazon founder and longtime CEO Jeff Bezos, Selipsky said the company has succeeded by listening to customers.

“Amazon has had many examples in its history where it said, we’re going to concentrate on customers and have a steadfast belief that we’re going to work with customers, we’re going to build what they want,” Selipsky expressed. “And if people want to perceive us in a certain way, we’re misunderstood, that’s OK, as long as customers understand where we’re going.”

One challenge Amazon currently faces is in meeting the demand for A.I. chips. The company chose to start making chips to supplement graphics processing units from Nvidia, the leader in the space. Both companies are racing to get a better supply on the market.

“I think the whole world has a shortage in the short term of computing capacity for doing generative A.I. and machine learning in general right now,” Selipsky said. He added that people are impatient, and the situation will improve in the following few months.