Topic of the Week – Amazon's Generative AI Push
Amazon, the eCommerce giant, is leveraging generative AI to revolutionise its logistics and operations. The company is using the technology to optimise delivery routes, create more intelligent warehouse robots, and better predict where to stock new items.
Amazon has set the bar high for package delivery, with 60% of Prime orders in March being delivered the same day or next day in the top 60 metropolitan areas in the US. The company is betting on generative AI to increase this figure, with the technology already being used to optimise delivery routes and make more intelligent warehouse robots.
Amazon's warehouse robots have grown from 350,000 in 2021 to over 750,000 in 2023, with the company adding AI transformer models to its robots to enable them to navigate more intelligently. The robots are reducing the burden on employees, creating new roles, and improving efficiency. However, there are concerns about the high-energy needs of generative AI and its potential to replace human workers.
Amazon is using generative AI to predict where best to place items it hasn't previously sold, reducing the need for workers to reach and bend. The company is also using AI to predict road closures and choose more efficient routes for its delivery drivers, reducing carbon emissions.
While Amazon claims that the use of AI is helping cut down the carbon footprint of package delivery, the training and running of generative AI is a carbon-intensive process. By 2027, AI servers worldwide are projected to use as much power every year as Sweden or the Netherlands, which conflicts with Amazon's 2019 commitment to reach net-zero carbon by 2040.
Amazon has invested heavily in generative AI, with a focus on developing its own AI tools and microchips. The company has also invested $4 billion in AI startup Anthropic, which makes chatbot Claude. While the impact of Amazon's generative AI push is still uncertain, the company's huge investment in the technology suggests a significant commitment to its long-term potential.
Amazon's generative AI push is a game-changer for same-day shipping and beyond. The technology has the potential to revolutionise the company's logistics and operations, improving efficiency, reducing carbon emissions, and creating new roles. However, there are concerns about the high-energy needs of generative AI and its potential to replace human workers. As Amazon continues to invest in this technology, it will be important to monitor its impact and ensure that it is used in a way that benefits both the company and its employees.
In other news
Roblox and Shopify partner to sell physical products in the metaverse.
eCommerce Market Stats
See some statistics relating to this week’s topics in the eCommerce market below.
eCommerce AI robot stats
The global eCommerce robot market is expected to grow from 1.3 million units in 2020 to 4.5 million units by 2025, at a Compound Annual Growth Rate (CAGR) of 24.1%.
The automation rate in eCommerce warehouses is expected to increase from 10% in 2020 to 30% by 2025.
eCommerce businesses that adopt robots can expect to see benefits such as:
Increased efficiency (71%)
Improved accuracy (64%)
Reduced labor costs (58%)
*Statistics sourced from Statista
That’s all for this week…
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