The other shoe drops – Amazon enters next-gen AI space

Amazon is previewing a new proprietary artificial intelligence (AI) platform – what does it mean for retail?

Since the introduction of the leading edge ChatGPT AI engine in late 2022, retail is abuzz with news about advanced AI initiatives and solutions. But until this week, a major player was conspicuously absent from the industry AI discussion.

No more. Amazon Web Services (AWS), the cloud services platform of Amazon, is launching a limited preview of a new generative AI model called Bedrock. Based on machine learning (ML), generative AI can create new content and ideas, including conversations, stories, images, videos, and music.

According to Amazon, Bedrock foundational models can be customized to fit the workflows of specific industries (including retail) and perform a range of tasks including writing blog posts, generating images, solving math problems, engaging in dialog, and answering questions based on a document. Developers are being provided with API-based access to Bedrock foundational models.

So how will Amazon, and the wider retail industry, be affected by the e-tailer’s public debut in the next-gen AI arena? Here are three predictions:

Amazon gets smarter

Obviously, Amazon has already been using the capabilities of Bedrock internally for some time. The e-tailer leverages advanced AI to support initiatives as varied as counterfeit detection, inventory handling, and tailoring video shopping content.

But Amazon is poised to get much smarter in how it conducts operations, which should strike fear into the hearts of its competitors (more on that shortly). Equipped with the latest and greatest capabilities of Bedrock, Amazon stands to gain significant competitive differentiation in areas of the enterprise including customer service, marketing, merchandising, HR, workforce management, and forecasting. And those gains are on top of its existing advantage as one of the world’s most successful retailers.

The tech giant gets bigger

Amazon makes no secret that it views e-commerce as a pillar upon which it builds other businesses including hosted web services, satellite broadband networks, and space exploration.

The retailer’s AWS business-to-business cloud platform subsidiary drives the majority of its operating profits, although retail remains the top source of revenue. Amazon is also growing its business of licensing its proprietary Just Walk Out frictionless shopping solution, which may well become enhanced with Bedrock AI functionality.

The launch of a successful hosted AI solutions business (even if Bedrock remains open source, consulting, customization and out-of-the-box solutions will be needed) would only enhance Amazon’s continuing growth from retailer into full-fledged tech giant.  

Rivals respond

Amazon does not operate in a vacuum. Chief competitor Walmart also actively uses proprietary AI technology across the enterprise, including in a highly publicized effort to streamline online fulfillment. Gap offers a third-party supply chain platform that includes AI-based automated features. And Chinese e-commerce giant JD has already publicized its own plans to release what it says will be an improved, industrial version of ChatGPT.

Walmart, Gap, and other retailers are undoubtedly already stepping up their AI development plans in response to Amazon’s announcement. The end result will likely be a sustained push for AI innovation across retail, which ultimately should benefit the industry as a whole.