In his latest letter to shareholders, Jeff Bezos highlighted some of the less publicized ways Amazon uses artificial intelligence (AI).
Although more attention is given to projects like its Alexa voice assistant and the machine learning behind its autonomous delivery drones, the e-commerce giant uses AI behind the scenes to grow its marketplace:
- By aggregating and analyzing purchasing data on products using machine learning, Amazon can more accurately forecast demand.
- It also uses machine learning to analyze purchasing patterns and identify fraudulent purchases. Paypal uses the same approach, resulting in a .32% revenue fraud rate, compared with the 1.32% industry average.
- In addition, Amazon utilizes browsing and purchasing data to provide tailored product recommendations and promotions.
Amazon’s cloud computing service, Amazon Web Services (AWS), will also make machine learning and other types of AI more readily available to outside companies. This could allow retailers without technical expertise in this area to take advantage of the data processing capabilities of AI to cater to their customers’ preferences. At the same time, Amazon would gain an additional revenue stream in a space likely to be in high demand soon.
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