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Amazon Just Staked Its Future on AI. Here’s Why That Matters

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Amazon CEO Jeff Bezos devoted his most recent shareholder letter to just four topics—and one of them was artificial intelligence. In the April 2017 letter, Bezos says:

“Big trends are not that hard to spot (they get talked about and written a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence.”

Artificial intelligence is, broadly, the science of making machines smart. The term encompasses an array of technologies, some of which are more mature than others. Machine learning is one such technology. It refers to the process of teaching algorithms to improve themselves, either through human supervised training or on their own.

The technology is at the heart of Amazon’s operations. And that should matter to marketers who want to better understand AI. Here’s why.

How Amazon Uses Artificial Intelligence

As Bezos points out in the letter:

“At Amazon, we’ve been engaged in the practical application of machine learning for many years now. Some of this work is highly visible: our autonomous Prime Air delivery drones; the Amazon Go convenience store that uses machine vision to eliminate checkout lines; and Alexa, our cloud-based AI assistant.”

All of these products employ machine learning algorithms to perform complex cognitive tasks—whether flying drones, recognizing products or interpreting commands—as well or better than humans. Each of these tasks—and countless others performed at Amazon by machine learning algorithms—generate data which is then used by those algorithms to improve.

It’s a virtuous cycle that allows Amazon to highly personalize its offerings, better predict what consumers want next, and pursue innovations at high velocity. All of this translates into competitive advantage for the ecommerce giant.

Amazon isn’t just applying AI and machine learning in consumer-facing applications, either. The company wants to “lower the costs and barriers to machine learning and AI so organizations of all sizes can take advantage of these advanced techniques,” says Bezos.

To that end, Amazon offers customer-ready AI systems that can be accessed by “simple API calls — no machine learning expertise required.” That means access to Amazon’s “natural language understanding, speech generation, and image analysis” systems through Amazon Web Services, the company’s highly successful cloud-computing arm.

Those are only the public applications of AI that Amazon employs. As Bezos points out:

“Much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more."

And these public and behind-the-scenes applications are only the beginning of Amazon’s AI ambitions.

“Watch this space,” says Bezos. “Much more to come.”

Why Should Marketers Care

If you’re a marketer, there are important lessons to learn from Amazon’s love affair with artificial intelligence and machine learning.

1. Behind-the-scenes AI matters. 

As marketers explore AI applications, they should understand that some of the technology’s biggest benefits may happen behind-the-scenes. Automating or augmenting internal tasks for improved productivity and performance may provide as much or more value than consumer-facing applications.

As Bezos notes: “Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations.” Marketers would do well to audit their current internal responsibilities to surface opportunities and ideas for AI applications.

2. Amazon is one example of a broader push to make AI technology more affordable and accessible. 

Other platforms like IBM Watson aim to make sophisticated AI tech available to brands. CRM and marketing automation solutions like Salesforce are integrating AI into their core product offerings. You may be using AI and not even know it—or soon be.

The challenge won’t be accessing the technology required to use machine learning in your business and marketing operations. It will be finding technical talent capable of building and executing AI solutions.

3. It is still Day 1 in artificial intelligence. 

In his first shareholder letter in 1997, Bezos declared it “Day 1” of the internet. Two decades later, he contends it is still Day 1 and Amazon’s driving interest is in remaining a company that remembers this fact. It’s Day 1 in AI, too.

Artificial intelligence receives a ton of buzz and funding, but there are a limited number of companies who have successfully applied the technology. Amazon certainly looks to be a market leader, but marketers should be aware that there isn’t a tried-and-true playbook yet for implementation.

In fact, that’s why we started the Marketing Artificial Intelligence Institute—to determine where real opportunities exist for marketers to improve performance with AI. Each week, we publish actionable information on how to do just that. Subscribe today to start connecting the dots.

Photo Credit: Robert Scoble

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