If Amazon Web Services’ annual re:Invent tech conference shows one thing, it’s that the cloud giant is fully embracing AI.
During the event, AWS shared numerous updates, introducing new AI agents and enhanced large language models, along with products designed for AI and agent development. The emphasis on AI for businesses was unmistakable. But are its clients as enthusiastic?
AWS CEO Matt Garman noted in his keynote that businesses have yet to see a return on their AI investments, although he believes that’s about to change rapidly.
“I believe that the rise of AI agents marks a pivotal moment in AI’s journey,” Garman stated. “It’s evolving from a technical marvel into something that provides real value. This shift could impact your business as significantly as the internet or the cloud.”
While analysts expressed admiration for some of the tech announcements from AWS this week, they are uncertain whether these changes will accelerate enterprise AI adoption or enhance AWS’ standing in the AI competition.
AWS remains a front-runner in cloud infrastructure, but its offerings in enterprise AI lag behind.
Companies like Anthropic, OpenAI, and Google dominate the enterprise AI market with their actual AI models. However, AWS does benefit from having integrated everything in-house, including its infrastructure and proprietary AI training chips.
Naveen Chhabra, a principal analyst at Forrester, mentioned via email to TechCrunch that despite many intriguing new technologies announced by AWS, the reality is that many businesses are not prepared to adopt AI just yet.
“AWS’ AI announcements indicate that they are thinking ahead, perhaps too far ahead,” Chhabra remarked. “Most enterprises are still in the pilot phase of AI and aren’t at the maturity level that AWS assumes they are to fully leverage these new offerings.”
A notable MIT study from August highlighted that 95% of enterprises aren’t experiencing a return on their AI investments.
Ethan Feller, an equity strategist at Zacks Investment Research, shared in a phone interview that it was the infrastructure announcements that grabbed his attention, rather than the new Nova AI models and agent-building capabilities that AWS promoted heavily.
“The AWS AI factory is quite compelling,” Feller stated, referring to a new initiative allowing clients to run AWS AI in their own data centers. “AWS plays a crucial role in where models are deployed and leads in the cloud industry. This is where Amazon truly excels. Focusing on their strengths is a smart move.”
Though Feller appreciates AWS’s attempt to delve into vertical AI, he suggests that collaborations with other AI firms like Anthropic and Nvidia might be a more effective strategy than relying solely on their own AI technology.
Regardless, AWS is still well-positioned to capture market share in the AI space while continuing to expand its core services.
As a top cloud provider, AWS has a strong business foundation that should insulate it from fluctuations in the AI market, irrespective of trends in the sector.
With AWS reporting $11.4 billion in operating income in the third quarter, it’s likely to feel less impact from potential downturns in the AI market compared to its competitors.
This stability allows AWS the flexibility to explore and refine its role in the AI landscape as it evolves. Therefore, even if businesses aren’t ready for the technologies announced today, AWS should keep pushing forward to enhance them.
Stay updated with TechCrunch’s extensive coverage of the annual enterprise tech event here, and check out all the announcements you might have missed so far here.
