Here's How Generative AI Factors Into Amazon's Plan for Growth

Amazon (NASDAQ: AMZN) ranks among the greatest growth stories in the stock market. Jeff Bezos founded the company in his garage in 1994 as an online bookseller. It's now the leader in e-commerce and cloud services. Amazon's share price has skyrocketed an astounding 234,700%, giving it a market cap of $2.4 trillion.

This remarkable growth story isn't over, either, thanks partly to a technology that has swept the corporate world over the last couple of years. Generative AI is a type of artificial intelligence (AI) that can create content, including responses to questions, images, software code, and more. Here's how generative AI factors into Amazon's plan for growth.

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Speaking of AI

If you want to know what's important to the executives of major companies, pay attention to what they say in their quarterly earnings conference calls. That's exactly what Jack Caporal, Research Director for The Motley Fool and Motley Fool Money, recently did.

Caporal analyzed how five mega-cap companies -- Apple, Nvidia, Microsoft, Alphabet, and Amazon -- talked about AI in their quarterly earnings calls. Specifically, he reviewed these companies' earnings calls from the quarter ending in December 2023 through the end of 2024.

Amazon executives mentioned AI 50 times in its quarterly calls during this period, although the references weren't limited to generative AI. Although the company's management spoke about AI frequently, the number of mentions was significantly less than Microsoft's and Nvidia's.

Caporal found that Amazon's team talked the most about the company's AI products, with 38% of total AI mentions. Amazon also emphasized its AI strategy and the impact of AI, with each topic receiving 20% of mentions.

Amazon's primary generative AI strategies

Amazon's business is organized into three segments: North America, international, and Amazon Web Services (AWS). Generative AI plays a key role in the growth strategies of each unit but is arguably most important to AWS.

Many generative AI models are trained and deployed in the cloud. As the leader in the cloud services market, AWS stands to benefit tremendously as organizations scramble to harness the power of generative AI. However, it faces stiff competition from Microsoft Azure, Google Cloud, and others.

To stay on top, AWS must offer tools to help customers keep up with the rapid technological changes. Amazon Bedrock, a service that supports building generative AI apps on AWS, is one key product many customers find especially attractive. It offers access to a wide range of large language models (LLMs). Amazon Q uses generative AI to help customers develop software and answer business questions.

AWS relies heavily on Nvidia's graphics processing units (GPUs) to power AI models. However, the unit has also developed its own AI chips -- Trainium for training AI models and Inferentia for AI inference. These chips help customers lower the costs of their AI efforts.

But generative AI is key to the growth of Amazon's North America and international segments, too. These units primarily focus on e-commerce. Amazon has launched generative AI tools to assist shoppers, try on apparel virtually, make personalized shopping recommendations, and more.

Beyond generative AI

Just how important is generative AI to Amazon's growth? In the company's 2024 Q4 earnings call, CEO Andy Jassy said:

[W]hile it may be hard for some to fathom a world where virtually every app has generative AI infused in it, with inference being a core building block just like compute, storage, and database, and most companies having their own agents that accomplish various tasks and interact with one another, this is the world we're thinking about all the time. And we continue to believe that this world will mostly be built on top of the cloud with the largest portion of it on AWS.

Amazon's AI initiatives aren't limited to generative AI, though. The company is also deploying AI robotics in its fulfillment centers. And it's working on developing artificial general intelligence (AGI), which could transform business and society at large.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet, Amazon, Apple, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.