E-commerce and cloud computing behemoth Amazon (NASDAQ:AMZN) is pouring millions into developing its large language model (LLM), Reuters reported. This would enable the company to compete with leading AI (Artificial Intelligence) offerings available in the market, including OpenAI’s ChatGPT and Alphabet’s (NASDAQ:GOOGL)-owned Google’s Bard.
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Amazon has assigned the code name “Olympus” to the LLM. Additionally, the report emphasized that Olympus boasts a staggering 2 trillion parameters, solidifying its position as one of the largest models being trained. To provide context, even OpenAI’s GPT-4 models, considered among the finest, are known to possess one trillion parameters.
While Amazon has not confirmed the news, it continues prioritizing investments in AI to strengthen its competitive positioning and accelerate growth, particularly in AWS (its cloud segment).
Amazon’s Investments in AI
During the Q3 conference call, Amazon’s management said the company is investing in three macro layers of AI, including the compute to train LLMs. Amazon has dedicated efforts to develop specialized silicon solutions tailored for LLM training and inference, with Trainium and Inferentia chips, respectively.
The company, via Amazon Bedrock, provides customers with access to prominent LLMs from third parties like Anthropic and Stability AI, as well as its proprietary LLMs known as Titan. Furthermore, the company’s generative AI coding companion, Amazon CodeWhisperer, has witnessed significant early traction and is a lot more powerful now with the launch of its new customization capability.
Amazon also announced a strategic partnership with Anthropic, aimed at enhancing its AI endeavors. This would enable AMZN to accelerate the adoption and integration of generative AI capabilities for AWS customers and drive the segment’s growth. With this backdrop, let’s look at what the Street recommends for Amazon stock.
Is Amazon a Buy or Sell Right Now?
Wall Street analysts are bullish about Amazon’s prospects. With 41 unanimous Buy recommendations, Amazon stock has a Strong Buy consensus rating. At the same time, the average AMZN stock price target of $176.13 implies 23.42% upside potential from current levels.
