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Amazon touts its low-cost cloud computing in generative AI race

Published 07/11/2023, 08:11 PM
Updated 07/11/2023, 08:30 PM
© Reuters. FILE PHOTO: The logo of Amazon Web Services (AWS) is seen during the 4th annual America Digital Latin American Congress of Business and Technology in Santiago, Chile, September 5, 2018. REUTERS/Ivan Alvarado/File Photo

By Jeffrey Dastin

AUSTIN (Reuters) - A key way that Amazon's (NASDAQ:AMZN) cloud division aims to set itself apart from rivals perceived to have a leg up on artificial intelligence is by competing on price, an executive said on Tuesday.

The AI models behind a viral chatbot like ChatGPT require immense computing power to train and operate, the kinds of costs Amazon Web Services (AWS) is good at lowering, said Dilip Kumar, vice president overseeing its applications group.

A potential boost is that the company, like Google (NASDAQ:GOOGL), has proprietary chips for AI.

"These models are expensive," Kumar said at the Reuters MOMENTUM conference in Austin. "We're taking on a lot of that undifferentiated heavy lifting, so as to be able to lower the cost for our customers."

The world's largest cloud provider by revenue faces a tall challenge. Rivals Microsoft (NASDAQ:MSFT) and Google have marketed higher profile, proprietary technology, capturing mindshare and some business in the sector's potentially lucrative AI contest.

Amazon's competition has likewise focused on reducing costs and has marketed free previews of such technology, though final pricing remained unclear.

On quality, Kumar did not answer how Amazon's own family of AI models known as Titan stacks up against its more famous counterparts such as the GPT series from Microsoft-backed OpenAI or Google's PaLM.

He instead pointed to other Amazon traits, such as "our specific way of dealing with privacy, our specific way of dealing with accuracy," at a time when concerns abound about what happens to confidential data given to AI and the technology's tendency to generate incorrect information.

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In addition, as the cloud industry's biggest player, "more companies of all sizes have (their) data already in AWS," he said, making it a reason to use its AI.

Like Google, Amazon is marketing the technology of other prominent startups to give customers choice.

The promise of AI aside, Amazon has faced uncertain economic conditions and slowing cloud revenue growth in the near term. Asked how Amazon's budget planning for 2024 is progressing, Kumar said of companies generally: "We're in a cycle where the spending is tight."

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