© Reuters. FILE PHOTO: The Amazon Web Services (AWS) logo is seen during the 4th Annual Latin American Digital Business and Technology Conference in Santiago, Chile, September 5, 2018. REUTERS/Ivan Alvarado/File Photo
Written by Jeffrey Dustin
AUSTIN (Reuters) – The main way Amazon’s (NASDAQ) cloud division aims to differentiate itself from competitors perceived as having artificial intelligence is to compete on price, an executive said on Tuesday.
The AI models behind a viral chatbot like ChatGPT require massive computing power to train and run, said Dilip Kumar, vice president overseeing its Applications group, the kinds of costs Amazon Web Services (AWS) is good at cutting.
A potential boost is that the company, like Google (NASDAQ:), has proprietary AI chips.
“These models are very expensive,” Kumar told the Reuters Momentum conference in Austin. “We’re taking on a lot of the undifferentiated heavy lifting, so we can keep the cost down for our customers.”
The world’s largest cloud service provider by revenue is facing a major challenge. Competitors Microsoft (NASDAQ:) and Google have marketed proprietary and highly-acclaimed technology and have taken share of the mind and some of the business in the sector’s lucrative artificial intelligence competition.
Similarly, competitor Amazon has focused on cutting costs and has marketed free previews of the technology, though final pricing has remained unclear.
In terms of quality, Kumar didn’t respond to how Amazon’s family of AI models known as Titan stacks up against better-known peers like Microsoft’s OpenAI-backed GPT series or Google’s PaLM.
Instead, he pointed to other Amazon traits, such as “our specific way of dealing with privacy, our specific way of dealing with precision,” at a time when concerns abound about what happens to confidential data given to AI and the technology’s tendency to create incorrect data. Information.
In addition, as the largest player in the cloud industry, he said “more companies of all sizes already have their data on AWS,” making it a reason to use their own AI.
Like Google, Amazon is commercializing the technology of other notable startups to give customers choice.
Aside from the promise of artificial intelligence, Amazon has faced uncertain economic conditions and slowing cloud revenue growth in the near term. Asked how Amazon’s 2024 budget planning is progressing, Kumar said of companies in general: “We’re in a cycle where spending is tight.”
