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 from new AI agents and updated large language models, to products with LLM and agent-building capabilities. AI for enterprise was everywhere. But are its customers just as eager?
AWS CEO Matt Garman acknowledged during his keynote that enterprises haven’t seen a return on AI investment yet. He thinks that’s about to change — and fast.
“I believe that the advent of AI agents has brought us to an inflection point in AI’s trajectory,” Garman said. “It’s turning from a technical wonder into something that delivers us real value. This change is going to have as much impact on your business as the internet or the cloud.”
While analysts told TechCrunch they were impressed by some of AWS’ tech announcements this week, they aren’t sure it’s enough to move the needle on enterprise AI adoption or change AWS’ position in the AI race.
AWS is one of the market leaders when it comes to cloud infrastructure; the same can’t be said for its enterprise AI offerings.
Anthropic, OpenAI, and Google hold a commanding lead when it comes to enterprise market share for actual AI models. AWS does have 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 over email that while AWS announced a lot of cool new technology, it doesn’t change the fact that many enterprises aren’t ready to adopt AI.
“AWS AI announcements show that AWS is thinking ahead and maybe far too ahead,” Chhabra wrote. “Most enterprises are still piloting AI projects and are rarely at the levels of maturity 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 enterprises aren’t 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 from this week — despite these being the products AWS hyped the most. Instead, it was the infrastructure announcements.
“The AWS AI factory is really compelling,” Feller said about 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 being run and is dominant in the cloud industry. I think that is 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 may make more sense to do so through partnerships with other AI players like Anthropic and Nvidia as opposed to using all of their own AI technology.
Despite all of this, AWS is still well positioned to carve out market share in the AI sector, while continuing to grow its core businesses.
AWS’ 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 the industry’s technology — regardless of what the AI trend of the moment 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, will likely 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 enterprises aren’t ready for the tech they release today, AWS should keep working to improve it.
Follow along with all of TechCrunch’s coverage of the annual enterprise tech event here, and see all the announcements you may have missed thus far here.
