Amazon Is Trying to Position Itself as an AI Leader. Is It Working?

Core Insights - Amazon is actively pursuing advancements in artificial intelligence, recently launching Alexa+, a new AI chatbot aimed at competing with OpenAI's ChatGPT and Google Gemini [1][2] Group 1: AI Developments - The Alexa+ site is currently available to a limited number of early access users, with the goal of enhancing Amazon's competitive position in the AI market [1] - Despite the launch, Alexa+ is perceived as less likely to become a primary AI agent compared to ChatGPT, which has 700 million weekly users, and Gemini, with 650 million monthly users [2] Group 2: Strategic Partnerships - Amazon has secured a significant deal with OpenAI, committing approximately $38 billion over the next seven years for Amazon Web Services (AWS) computing power, positioning OpenAI as a major AWS customer [4][5] - The changing dynamics between Microsoft and OpenAI have allowed Amazon to capitalize on this relationship, which is crucial as Amazon has been losing market share in cloud computing [6] Group 3: Market Position and Growth Potential - As of Q3 2025, AWS holds a 29% share of the cloud computing market, down from 34% prior to the launch of ChatGPT in 2022, while Microsoft Azure and Google Cloud hold 20% and 13% respectively [7] - The partnership with OpenAI could help Amazon regain market share in cloud computing, which is vital for its profitability, as AWS accounts for about 66% of Amazon's operating income [11] - Goldman Sachs projects that global AI cloud computing spending could reach $2 trillion by 2030, indicating significant growth potential for Amazon in this sector [12] Group 4: Future Prospects - There are ongoing discussions for a potential investment of at least $10 billion into OpenAI, which could enhance Amazon's access to AI technology and strengthen its position in the AI landscape [9][10]