Amazon CEO Andy Jassy Says Generative Artificial Intelligence (AI) May Be the Largest Technology Transformation Since the Internet. 1 Stock to Buy If He’s Right.
In Amazon‘s (AMZN 1.67%) annual shareholder letter released on Thursday, CEO Andy Jassy said, “Generative AI may be the largest technology transformation since the cloud … and perhaps since the Internet.” If his excitement about artificial intelligence (AI) was apparent from that statement, he went on to say, “The amount of societal and business benefit … will astound us all.”
There’s no denying that AI has the potential to generate a windfall for companies that get in on the ground floor. You might be surprised to learn that Amazon is one such company. According to Jassy, “much of this world-changing AI will be built on top of Amazon Web Services (AWS).”
Amazon’s all-in on AI
When AI adoption started in earnest last year, many believed Amazon was falling behind, but that narrative is flawed. The company has since unveiled a wide range of AI initiatives across its vast retail and cloud computing empire. It developed specialized processors that run AI models, AI-powered apps to help its e-commerce customers, and conversational digital assistant Q to help AWS users. Amazon also has a $4 billion stake in start-up Anthropic AI, further boosting its credentials.
However, it’s Amazon’s forward-looking strategy that should have AI investors excited. Jassy laid out a vision not focused on creating a killer consumer-facing app — like ChatGPT — but rather focused on providing developers with foundational AI models and the building blocks needed to create customized AI systems to suit their needs.
Amazon also announced that it added renowned AI pioneer Andrew Ng to its board. While Ng might not be a household name, he’s a rock star in AI.
When Alphabet first launched the Google Brain project in 2011 to develop a deep learning neural network to teach AI to recognize images, it was spearheaded by Stanford computer scientist Andrew Ng and noted AI researcher and Google fellow Jeff Dean. The project was wildly successful and is viewed as the catalyst that jump-started modern AI.
Ng offers a wealth of experience that will help Amazon succeed at AI. And at just 3 times sales, Amazon stock offers an attractive valuation.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.
