Amazon (AMZN) Teams up With Upstage to Boost Gen AI Efforts
Amazon AMZN is leaving no stone unturned to bolster its generative AI capabilities on the back of its cloud computing arm, Amazon Web Services (“AWS”), which has been its key growth driver. Shares of Amazon have gained 83.3% over a year.
The latest partnership with a South Korean AI startup called Upstage is a testament to the same.
As part of the deal, Upstage launched its small language model (SLM) called SOLAR MINI on AWS. It has also selected AWS to train SOLAR MINI with the help of Amazon SageMaker.
SOLAR MINI is capable of performing various language tasks in Korean and English. The tasks include understanding, summarizing, translating and predicting new content.
The model eliminates the requirement of training generative AI models from scratch, thus enabling customers to get started with generative AI seamlessly.
As SLMs are lightweight compared with LLMs, SOLAR MINI is well-equipped to run the process of using a trained machine learning model to make predictions at lower costs, given a training dataset of 10.7 billion parameters.
Notably, SOLAR MINI is available on Amazon SageMaker JumpStart and AWS Marketplace.
The underlined collaboration is expected to aid AWS in gaining strong traction among enterprises of all sizes across various industries like entertainment, healthcare, research, e-commerce and education.
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Amazon’s Growing Generative AI Efforts
In addition to the Upstage deal, AWS recently extended its collaboration with NVIDIA NVDA to power its portfolio with the generative AI technology.
The NVIDIA Blackwell GPU platform, which was introduced at GTC 2024, will be available on AWS. This will aid in speeding up inference workloads for resource-intensive, multi-trillion parameter language models.
AWS strives to enable customers to explore new generative AI capabilities by delivering secured and advanced infrastructure, software and services. In this regard, AWS will offer NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs. AWS also intends to provide Amazon Elastic Compute Cloud instances, backed by NVIDIA Grace Blackwell GPU.
Apart from this, AWS offers Amazon Bedrock, which has provided it with a breakthrough in the generative AI space. Amazon Bedrock offers seamless access to high-performing foundation models from AI companies through an API.
The company also made the Amazon Titan Embeddings model generally available. It added Meta’s Llama 2 to Amazon Bedrock as a new model, which will be available through API.
AWS offers a new capability of Amazon CodeWhisperer, which is designed to offer generative AI-powered customized code suggestions by leveraging an organization's internal codebase.
Growing generative AI efforts are expected to aid Amazon in capitalizing on the immense growth prospects in the generative AI market.
Per an Allied Market Research report, the global generative AI market’s value is likely to hit $191.8 billion by 2032, witnessing a CAGR of 34.1% between 2023 and 2032.
Bottom Line
AWS’s solidifying prospects in this promising market are expected to continue aiding its performance. Moreover, its expanding portfolio will drive its customer momentum, which, in turn, will likely aid its dominant position in the cloud computing market, wherein companies like Microsoft MSFT and Alphabet’s GOOGL Google are also gaining steam.
Amazon, currently carrying a Zacks Rank #2 (Buy), accounted for 31% of the worldwide cloud provider market in fourth-quarter 2023, per the latest Synergy Research Group data. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Notably, AWS generated revenues of $24.2 billion (14% of the total sales) in the same quarter, up 13% year over year.
Microsoft, which accounted for 24% of the market, is riding on solid momentum across its Intelligent Cloud business that reported $25.9 billion in revenues (41.7% of the total revenues), up 20% year over year in second-quarter fiscal 2024. The business is benefiting from the solid adoption of Azure, driven by strength in Azure AI. Azure and other cloud service revenues grew 30% year over year. Microsoft is also making strong efforts to power its cloud capabilities with generative AI.
Google Cloud is contributing substantial growth to Alphabet's total revenues. Growing generative AI capabilities in the cloud, increasing data centers, availability zones and cloud regions are expected to keep boosting Alphabet's cloud position. Alphabet’s Google Cloud acquired 11% of the market, and reported revenues of $9.19 billion (10.6% of the total revenues) in fourth-quarter 2023, up 25.7% year over year.
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