The rush on artificial intelligence (AI) companies isn’t slowing down. In November 2022, the launch of ChatGPT generated a market frenzy. Now, companies are clamoring to get in on what the Economic Times describes as a “Silicon Valley gold rush” in an attempt to acquire the new firms making the biggest strides forward.
The hunt for the next ChatGPT is on, and Amazon (NASDAQ:AMZN) just took a significant step forward in the AI wars. Today, the tech sector leader announced that it will be partnering with Hugging Face, an AI startup with wide-reaching technological applications. AMZN stock has been rising this morning since news of this partnership broke.
Does this new deal mean that Amazon will have a competitive edge as the AI wars continue to develop? Let’s take a closer look at what investors should be expecting.
AMZN Stock in the Age of AI Wars
Since markets opened today, AMZN stock has been fairly volatile. While it is overall performing well, shares have lost some of their previous momentum. As of this writing, it is up 2.3% for the day, but it could easily keep rising.
Amazon has seen multiple positive headlines today, but its Hugging Face news is the most likely to help the company grow in the long term. This new partnership is yet another reason AMZN should be counted among the best AI stocks to buy in 2023.
What is Hugging Face? Founded in 2016, the startup is a software development hub on a mission to “build, train and deploy state of the art models powered by the reference open source in machine learning.” The list of companies that use its technology includes Microsoft (NASDAQ:MSFT), Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google AI and Intel (NASDAQ:INTC). Now it includes Amazon Web Services (AWS), a subsidiary of the tech giant that dominates the cloud computing space.
In a recent blog post, Hugging Face highlights that the object of the partnership is to improve AI accessibility. This means helping make the machine-learning models of the future accessible to the AI community. As AWS CEO Adam Selipsky states:
“Generative AI has the potential to transform entire industries, but its cost and the required expertise puts the technology out of reach for all but a select few companies. Hugging Face and AWS are making it easier for customers to access popular machine learning models to create their own generative AI applications with the highest performance and lowest costs. This partnership demonstrates how generative AI companies and AWS can work together to put this innovative technology into the hands of more customers.”
That isn’t where it ends. Hugging Face CEO Clem Delangue recently revealed that cutting-edge AI model Bloom will be run on an AWS chip. According to Reuters, this open-source model is able to compete with the model used by OpenAI to build ChatGPT in terms of size and scope. If that is true, the next ChatGPT could be in the hands of Amazon, pushing it to the front of the AI race.
The Bottom Line
Clearly, if successful, this partnership will be a significant win for both companies. Supplying AI developers with the tools they need to create new models and products is a cornerstone of the AI boom, and it won’t be slowing down anytime soon. Hugging Face is a central hub for AI professionals to display models and open-source code. Now, with the reach of AWS, it will be able to reach even more developers across the globe. Additionally, if Bloom can truly compete with ChatGPT, Amazon will have an undisputed advantage in the AI wars. This new partnership puts AMZN stock in an excellent position to soar as the AI boom continues.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.