Amazon hits $2 trillion market valuation driven by AI, growth in cloud business

Amazon has achieved a market valuation of $2 trillion for the first time, driven by a surge in enthusiasm for artificial intelligence (AI). On Wednesday, Amazon's shares rose by 3.9 per cent to close at $193.61, pushing the company's market value past the $2 trillion mark.

This places Amazon among tech giants like Alphabet, Nvidia, Microsoft, and Apple. Amazon's cloud computing division, Amazon Web Services (AWS), reported the highest sales growth in a year for the first quarter, contributing to the stock's performance. Microsoft, Apple and NVIDIA are the only three companies in the world to have crossed the $3 trillion mark so far. 

Strategic cost-cutting and restructuring moves, along with the focus on AI, have also boosted investor confidence.

'AI-fication' of Alexa

Amazon is planning a major update to its voice assistant, Alexa, to better compete with AI chatbots from Google, Microsoft, and OpenAI. This revamp can transform Alexa into a much smarter personal assistant.

The initiative, known internally as 'Project Banyan,' represents the most significant change to Alexa since its debut in 2014 with the Echo speaker line. The key feature of this overhaul is the integration of conversational generative AI. This technology will enable Alexa to understand and respond to complex prompts and questions in a more human-like manner.

According to a report by Reuters, Amazon has named the upgraded assistant "Remarkable Alexa." CEO Andy Jassy has personally invested in the project, setting an internal deadline of August for the new version's release. In an April letter to shareholders, Jassy hinted at these changes, promising a "more intelligent and capable Alexa."