Amazon has been at the forefront of applying artificial intelligence to improve its ecommerce operations and supply chain management. However, the ecommerce giant is now looking to leverage its AI expertise to disrupt the financial services industry. Over the past few years, Amazon has made several key investments and releases that aim to make AI more accessible to retail investors. This includes the launch of Amazon SageMaker, a fully managed service that allows developers and data scientists to quickly build, train and deploy machine learning models. Amazon also acquired and integrated AI-powered robo-advisor startup Scout into its Amazon Pay division. Most recently, Amazon announced it is collaborating withMotley Fool to build an AI-powered stock trading app for retail investors. With Amazon’s vast resources in cloud computing and AI, it is well-positioned to be a major player in democratizing AI for investing and trading. The initiatives demonstrate how Amazon is continuing to expand its AI capabilities beyond retail and into finance.
Amazon SageMaker lowered barriers for AI model building
One of Amazon’s key moves in AI was the 2017 launch of Amazon SageMaker. This fully managed service has made it significantly easier for developers to build, train and deploy machine learning models quickly. By handling the heavy lifting of setting up infrastructure and managing servers, SageMaker removes undifferentiated heavy lifting and lowers barriers to AI adoption. Retail investors can leverage SageMaker’s ready-to-use algorithms and frameworks to analyze historical market data and identify patterns or signals predictive of stock performance. Portfolio managers are also using SageMaker to build AI-based trading strategies and backtest model performance. The service integrates seamlessly with other AWS offerings like S3 for storage and Lambda for serverless execution. This end-to-end platform for developing and deploying custom AI models is accelerating machine learning adoption across many industries, including investing and trading.
Acquisition of AI-powered robo advisor Scout
In 2020, Amazon acquired Scout, an AI-powered robo advisor startup based in New York. Scout’s technology provides automated investment management by utilizing natural language processing and machine learning algorithms. The robo advisor builds personalized portfolios for clients based on their financial situation and goals. It also provides dynamic portfolio monitoring and rebalancing. Amazon integrated Scout’s capabilities into Amazon Pay, allowing customers to more easily open investment accounts. While Amazon shut down Scout’s standalone app, the core technology now powers Amazon’s investment product offerings. Retail investors leveraging Amazon Pay can benefit from automated, algorithmic investment advice. This allows individuals to invest in diversified ETF portfolios tailored to their needs, without requiring large account minimums or high fees.
Stock trading app partnership with Motley Fool
In January 2023, Amazon announced it is collaborating with financial services company The Motley Fool to build an AI-powered stock trading app. Leveraging The Motley Fool’s stock research and analysis, as well as Amazon’s AI and cloud capabilities, the companies aim to create a mobile trading app for novice retail investors. Key features will likely include AI-generated investment recommendations, predictive analytics, risk analysis and automated rebalancing. Amazon’s data science team will apply natural language processing to interpret Motley Fool’s corpus of stock research and build AI models to generate personalized insights and alerts for app users. Given Amazon’s prior successes with AI applications in ecommerce and operations, the company is well-positioned to deliver an AI assistant that makes stock trading and investing more accessible to the everyday consumer. The app has yet to launch, but represents an ambitious foray into AI-powered investment services and advice.
AWS cloud leadership powers AI innovation
Underpinning Amazon’s AI efforts is its undisputed leadership in cloud computing via Amazon Web Services. AWS provides the core infrastructure for storage, computing and services to train and run machine learning models. It offers purpose-built instances like EC2 P4 GPUs optimized for AI workloads. AWS also enables virtually unlimited scale, allowing data scientists to leverage massive datasets required for accurately training AI algorithms. The cloud platform seamlessly integrates with Amazon’s own AI services like SageMaker. Third parties can also build custom AI assistants leveraging services like Lex, Polly, Comprehend and Rekognition. AWS delivered over $60 billion in revenue in 2022, providing the financial resources for Amazon to aggressively pursue AI innovation. Dominance in cloud computing gives Amazon a key competitive edge in bringing AI solutions like automated investing apps to market.
Amazon’s growing investments and initiatives in AI signal its ambitions to be a disruptive force in democratizing artificial intelligence for investing and trading. Leveraging its cloud leadership and research innovations, Amazon is pursuing AI applications that make generating trading signals, executing trades and managing portfolios accessible to everyday investors. If executed well, Amazon could significantly expand retail access to AI-powered investment automation and advice.