If Amazon Web Services’ annual re:Invent tech conference proves anything, it’s that the cloud infrastructure player is going all in on AI.
AWS announced made dozens of announcements of new AI agents and updated large language models for products with LLM and agent building capabilities. AI for the enterprise was everywhere. But are its customers as eager?
AWS CEO Matt Garman acknowledged during his keynote that companies have yet to see a return on AI investments. He believes that is about to change – and quickly.
“I think the advent of AI agents has brought us to an inflection point in the trajectory of AI,” Garman said. “It’s going from a technical marvel to something that gives us real value. This change will have as much impact on your business as the Internet or the cloud.”
While analysts told TechCrunch they were impressed by some of AWS’s tech announcements this week, they’re not sure it’s enough to move the needle on enterprise AI adoption or change AWS’s position in the AI ​​race.
AWS is one of the market leaders when it comes to cloud infrastructure; the same cannot be said for the company’s AI offerings.
Anthropic, OpenAI and Google have a commanding lead when it comes to enterprise market share for actual AI models. AWS has the advantage of having everything in house, including infrastructure and its own AI training chips.
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Naveen Chhabra, a principal analyst at Forrester, told TechCrunch via email that while AWS announced a lot of cool new technology, it doesn’t change the fact that many companies aren’t ready to adopt AI.
“AWS AI announcements show that AWS is thinking ahead, and perhaps too far ahead,” Chhabra wrote. “Most companies are still piloting AI projects and are rarely at the maturity level AWS expects them to be to take advantage of the offerings that come out of these announcements.”
A widely cited MIT study from August found that 95% of companies are not seeing a return on investment from AI.
Ethan Feller, an 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 what stood out to him as interesting as of this week — despite those being the products AWS hyped the most. Instead, it was the infrastructure messages.
“The AWS AI factory is really compelling,” Feller said of a new initiative that allows customers to run AWS AI in their own data centers. “AWS is a huge player in where the models are run and is dominant in the cloud industry. I think that’s where Amazon’s expertise really lies. It’s a good thing to double down on where they have expertise.”
Feller likes that AWS is looking to make a vertical AI play, but he thinks it might make more sense to do so through partnerships with other AI players like Anthropic and Nvidia, as opposed to using all of its own AI technology.
Despite all this, AWS is still well positioned to carve out market share in the AI ​​sector while continuing to grow its core businesses.
AWS’s position as an industry-leading cloud provider means it has a solid business foundation despite what happens in the AI ​​market, because it provides the rails for industry technology – whatever the current AI trend is.
If the AI ​​industry ends up being the bubble some say it is, AWS, which recorded $11.4 billion in operating income in the third quarter, is likely to be less affected by a negative change in AI market conditions than its peers.
This gives AWS room to experiment and iterate on what its place in the AI ​​market could look like down the road. That’s why, even if companies aren’t ready for the technology they’re releasing today, AWS should continue to work to improve it.
Catch up on all of TechCrunch’s coverage of the annual enterprise tech event here, and see any announcements you may have missed so far here.