Why Amazon Was the Rare AI and Cloud Play Left Out of the Nvidia Bump

When Nvidia's stock shot up 5% after the company announced its plan to acquire Arm last September, many investors in the artificial intelligence (AI) and cloud space assumed that other big players in the field, like Amazon, would also see a boost. However, Amazon's stock remained largely flat, leading analysts and investors alike to wonder: why was Amazon left out of the Nvidia bump?

To understand this, it's important to take a closer look at Amazon's AI and cloud offerings. While Nvidia's focus is mainly on hardware solutions, Amazon's AI and cloud services are more software-driven. This means that Amazon's offerings are more accessible to customers and can be integrated into a wider range of systems and applications. However, this also makes it more difficult to pinpoint exactly how much Amazon is profiting from these services, since they are often bundled and sold as part of larger Amazon Web Services contracts.

For example, Amazon's SageMaker tool, which allows developers to build, train, and deploy machine learning models, is just one feature of the larger AWS platform. While SageMaker has become increasingly popular in recent years and is seen as a key player in the machine learning space, it's difficult to quantify exactly how much revenue SageMaker alone is generating for Amazon.

Another AI tool offered by Amazon is Rekognition, which allows customers to analyze and recognize objects and scenes within images and videos. However, Rekognition has also come under fire for its potential use in surveillance and violation of privacy, leading some customers to steer clear of the tool.

In addition to its software offerings, Amazon has also been investing heavily in AI research and development, particularly in the areas of natural language processing (NLP) and computer vision. One notable example of this is the Amazon Echo, which uses NLP to understand and respond to voice commands. However, the extent to which these investments have paid off in terms of revenue and profit is unclear.

So, what does this all mean?

1. Amazon's AI and cloud offerings are more software-driven and less hardware-driven than Nvidia's, making it more difficult to quantify the revenue generated by these services.
2. Some of Amazon's tools, like Rekognition, have attracted controversy and may deter customers from using these services.
3. Despite these challenges, Amazon's continued investments in AI research and development, as well as its growing customer base for AWS, suggest that the company remains a major player in the AI and cloud space.