If Amazon Web Services’ annual technology conference re:Invent proves anything, it’s that cloud infrastructure players are going all-in on AI.
AWS has made dozens of announcements ranging from new AI agents and updated large-scale language models to products with LLM and agent building capabilities. Enterprise AI was everywhere. But are your customers just as enthusiastic?
In his keynote, AWS CEO Matt Garman acknowledged that companies are not yet reaping the benefits of their AI investments. He thinks that’s about to change soon, and fast.
“With the advent of AI agents, we believe we have reached an inflection point in the trajectory of AI,” Garman said. “This is going from a technological wonder to something that brings real value to us. This change will have as big an impact on your business as the Internet and the cloud.”
Analysts told TechCrunch that while they were impressed with some of AWS’ technology announcements this week, they aren’t sure it’s enough to move the needle on enterprise AI adoption or change AWS’ position in the AI race.
AWS is one of the market leaders when it comes to cloud infrastructure. The same cannot be said for enterprise AI products.
When it comes to enterprise market share for real-world AI models, Anthropic, OpenAI, and Google hold a commanding lead. AWS has the advantage of having everything in-house, including the infrastructure and its own AI training chip.
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Naveen Chhabra, principal analyst at Forrester, told TechCrunch in an email that AWS has announced a lot of great new technology, but the fact remains that many companies aren’t ready to adopt AI.
“The announcement of AWS AI shows that AWS is looking ahead, and perhaps much further,” Chhabra wrote. “Most companies are still piloting their AI projects, and few have reached the level of maturity that AWS expects. They can take advantage of the services provided by these announcements.”
A widely cited August study from MIT found that 95% of companies are not seeing a return on investment from AI.
Ethan Ferrer, equity strategist at Zacks Investment Research, told TechCrunch in a phone interview that the new Nova AI models, agents and model building capabilities weren’t the focus of AWS’s focus this week, even though they are the most touted products. Instead, announcements were made about infrastructure.
“AWS AI Factory is really exciting,” Ferrer said of the new initiative that allows customers to run AWS AI in their own data centers. “AWS is a huge player wherever models are being run and dominates the cloud industry. I think that’s where Amazon’s expertise really lies. It’s good to build on Amazon’s expertise.”
Ferrer likes that AWS is aiming for an AI vertical, but thinks it might make more sense to do so through partnerships with other AI players like Anthropic or Nvidia, rather than using all of its own AI technology.
Despite this, AWS is well-positioned to gain market share in the AI space while continuing to grow its core business.
AWS’s position as the industry’s leading cloud provider means that no matter what the current AI trends are, we have a solid business foundation no matter what happens in the AI market, as we provide the industry’s technology rails.
If the AI industry becomes what some say is a bubble, AWS, which posted operating income of $11.4 billion in the third quarter, could be less affected by negative changes in AI market conditions than its peers.
This gives AWS room to experiment and iterate on what its position in the AI market will look like in the future. That’s why AWS needs to keep working to improve its technology, even if companies aren’t ready for the technology it releases today.
Follow all of TechCrunch’s coverage of the annual enterprise tech event here and catch all the announcements you missed here.
