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Amazon (NASDAQ:AMZN) held its annual AWS Summit this week and the biggest takeaway from the cloud computing giant is that “practical” use cases of generative artificial intelligence were demonstrated, investment firm Baird said.
“Irrespective of whether there are valuation ‘bubbles’ with respect to GenAI, our view is that AI remains a key underlying driver of competitive advantages for big tech (long-time Baird investment thesis), and that GenAI will provide another boost that ultimately impacts every service that people and companies use,” analyst Colin Sebastian wrote in an investor note. Sebastian added that the current use cases of generative AI should help boost adoption and over time, “become an incremental driver for AWS and catalyst for AMZN.”
Sebastian has an Outperform rating and $213 price target on Amazon.
Some of the key takeaways from companies who were at the summit include:
- A video game company has used generative AI for 80% to 90% of its animation and creation.
- Fandom has used it to automate community and content reviews.
- The Nasdaq has reduced the time to conduct market abuse investigations by roughly 33%.
- Bayer has improved developer productivity by 30%.
- Pfizer has used it to assist with cancer research and find trends.
- Principal Financial has used it for customer service.
- Rocket Mortgage, Adobe, Merck, BMW, ADP and Intuit also offered use cases for generative AI.
And while there is some concern amongst investors that companies are spending enormous amounts of money on AI, Sebastian said that Amazon’s own use cases could allow it to “absorb meaningful capacity in infrastructure if AWS demand ultimately falls short of expectations.”