, Inc. (AMZN): Retail, Cloud Domination Now, AI Later

Updated on, Inc. (NASDAQ:AMZN) management is eying artificial intelligence as their next area of conquest after securing a dominant position in both retail and cloud services. Indeed, retail and cloud services seem like an odd couple, two businesses that don’t belong together under one company, but Amazon has certainly succeeded in combining them. In fact, some Fortune 500 companies now consider Amazon Web Services to be the gold standard for the public cloud, demonstrating that the company can do much more than sell products online.

The only question now is whether the online retailer and cloud service provider can repeat its success in yet another area.

Amazon a favorite of Fortune 500 companies

The public cloud provides some of the backbone for online retailers, so it’s not as odd as some might think for an online retail powerhouse like Amazon to expand into this area. Goldman Sachs analyst Heather Bellini and team recently hosted News Corp CTO Paul Cheesbrough as part of their series on migrating to the public cloud. The media giant was an early adopter, and it aims to migrate 75% of its compute to the public cloud by the end of this year, marking a significant increase from the 20% it was at before.

He explained that the next 25% of the move will be difficult as it makes up two major categories: third-party apps that don’t have a cloud equivalent yet, and apps with very sensitive and confidential information. He also said they selected AWS as its primary cloud vendor and “weapon of choice,” and although he is positive on Google’s Cloud Platform, he thinks Amazon will be “incredibly hard to catch.”

Amazon targets AI next

So now with cloud success under its belt, the company is turning its attention to artificial intelligence, according to comments made by Founder and CEO Jeff Bezos at the Code Conference last week. RBC Capital Markets analyst Mark Mahaney and team attended the conference and reported this week that Bezos places a great emphasis on AI, even saying that it would be “hard to overstate” its potential impact over the next two decades. The RBC team noted that the company sees improvements in AI, machine learning and deep data analysis as creating new market opportunities for it.

Amazon shares declined by as much as 0.27% to $724.76 during regular trading hours on Tuesday.

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