Proactive Investors - Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ) is positioning itself to catch up to Microsoft (NASDAQ:MSFT) in terms of how its cloud service utilises generative AI, analysts believe.
It comes after the e-commerce giant announced it had increased its stake in OpenAI rival Anthropic by US$2.75 billion to US$4 billion.
Although Amazon will retain a minority stake and won’t take up a board position at Anthropic, it will implement the group’s technology, specifically its ChatGPT rival Claude, into its services.
Claude 3 is available on Amazon Web Service, the group’s cloud service, and Anthropic has agreed to use AWS as its primary cloud service provider.
Anthropic is also using Amazon’s chips Trainium and Inferentia to train its foundation models.
Analysts at Bank of America (NYSE:BAC) believe these advancements could mean that Amazon, like Microsoft, start to offer these AI capabilities to its cloud customers.
Bank of America said: “While investors may view Amazon as behind Azure in GenAI-capabilities in the cloud, this perception gap could converge as Anthropic capabilities converge with ChatGPT, and AWS starts to benefit more from AI-driven demand growth.”
Therefore, the US bank reiterates its ‘buy’ recommendation for Amazon and targets a US$204 share price, representing a near 14% premium to the current market value.