Amazon shares slumped last week and risk further selling despite a big AI investment.
AMZN: Weekly Chart
AMZN shares rallied this year to find resistance at the $144 highs from last summer. A further downturn is possible in the stock, with $100 a potential target.
Amazon’s move into AI has been confirmed with a $4 billion bet on OpenAI rival Anthropic to provide advanced deep learning and other services for its Amazon Web Services (AWS) customers. Google had already invested $400 million in the company, which was founded by former OpenAI executives.
Anthropic recently released its first consumer-facing chatbot, Claude 2, which is available on subscription, like OpenAI’s ChatGPT. Anthropic is already working on a chatbot it calls Claude-Next, which is said to be 10 times more powerful than any current AI.
The investment pitches Amazon against Microsoft’s investments in OpenAI and its ChatGPT bot.
“We have tremendous respect for Anthropic’s team and foundation models and believe we can help improve many customer experiences, short- and long-term, through our deeper collaboration,” said Amazon chief executive Andy Jassy.
Anthropic will use AWS as its primary cloud provider for the “majority of workloads”, and use AWS-designed chips in the foundation models of its AI applications.
Amazon is aiming to have its Trainium and Inferentia chips seen as alternatives to those produced by Nvidia, which has been the early market leader in the generative AI space, for training and running large language models. These developments may help the e-commerce firm later, but current market headwinds threaten further sales in the near term.
