Amazon's Usage of Artificial Intelligence: An Analysis

This paper analyzes Amazon's usage of artificial intelligence and machine learning to enhance customer services and grow its business. It discusses the background information of Amazon, its financial data, market information, and competition. The paper also explores how Amazon uses AI, the type of settings and/or where AI is used, and implementation issues. It concludes with the author's opinion and suggestions for further enhancement.

Running head: ARTIFICIAL INTELLIGENCE
Artificial Intelligence
Name of the Student
Name of the University
Author Note

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Table of Contents
I. Introduction.............................................................................................................................2
A. Brief summary/recap of artificial intelligence..................................................................2
B. Summary of businesses/organizations reviewed (below)..................................................2
II. Background Information.......................................................................................................2
A. Artificial Intelligence company(s) reviewed/explored................................................2
B. Relevant facts about the overall company...................................................................2
1. Size & demographics.....................................................................................................3
2. Financial information.....................................................................................................3
3. Market information & competition................................................................................3
III. Usage....................................................................................................................................3
A. How company(s) use the topic (AI)..................................................................................4
B. Type(s) of setting and/or how/where the (AI) is used.......................................................4
C. Implementation issues reported regarding the technology................................................4
IV. Implementation Success(es).................................................................................................5
A. How successfully company(s) using the (AI)?.................................................................5
B. Consideration for further development & usage...............................................................5
V. Conclusion(s)........................................................................................................................5
A. Your opinion of their current usage..................................................................................5
B. Your suggestions for possible further enhancement.........................................................6
References..................................................................................................................................7

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I. Introduction
A. Brief summary/recap of artificial intelligence
Artificial Intelligence is the study of intelligence exhibited by machines. The study is
dedicated towards providing solutions, which are cognitive in nature and are generally
associated with the peak performances of human intelligence that involves problem solving,
learning and recognizing different patterns (Stoica et al., 2017).
B. Summary of businesses/organizations reviewed (below)
This paper will be used to analyze the uses of AI by Amazon Inc., one of the leading
users of artificial intelligence alongside Google. The reason for choosing Amazon Inc. is that
they have achieved a huge growth in their business by using machine learning to provide
their customers with better services and thus keep them satisfied.
II. Background Information
A. Artificial Intelligence company(s) reviewed/explored
Amazon has been experimenting with various applications of artificial intelligence to
build systems based on machine learning. Amazon was able grow its business increase its
customer support quality along with enhancing the speed of its logistics by incorporating
machine learning. Thus, Amazon Inc. started Amazon Web Services (AWS) to assist other
users to grow their businesses by using its cloud-based machine learning services (Amazon,
2015).
The present market is centered on customer satisfaction to increase business pipeline.
Thus, Amazon deployed a team of developers to achieve that goal using artificial
intelligence. The powerful yet very simple tools for machine learning were created to scale
and handle various environments, which are critical in nature (Broder, 2018).

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B. Relevant facts about the overall company
1. Size & demographics
Amazon is one of the largest e-commerce companies spread across 14 countries from
the United States to China and have employed over 341,400 employees (AMZN Company
Profile & Executives - Amazon.com Inc. - Wall Street Journal, 2018).
2. Financial information
Financial data for the years 2014-2016
Revenue 12/31/2016 12/31/2015 12/31/2014
Total Revenue 135,987,000 107,006,000 88,988,000
Cost of Revenue 88,265,000 71,651,000 62,752,000
Gross profit 47,722,000 35,355,000 26,236,000
Table 1: Financial Data for 2014-2016
(Source: AMZN Financial Statements - Amazon.com Inc. - Wall Street Journal, 2017)
3. Market information & competition
Amazon Inc. has targeted the market for both e-commerce and cloud computing using
various strategies ranging from effective pricing of goods and services to fast customer
services by gathering their information.
Amazon Inc. faces serious competition from EBay and Alibaba in the e-commerce
sector. However, in the cloud computing and machine learning sector there is no other better
competition than Google.
III. Usage

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A. How company(s) use the topic (AI)
Amazon has been using artificial intelligence as their prime tool for gathering
customer information. They gather data from the customers’ web surfing history and develop
a list of recommendations based on that information. This application of machine learning
has put Amazon in the front-end of e-commerce revolution. They have used this to gain an
advantage in the market over its competitors. The AWS has also helped Amazon Inc. to
achieve a remarkable milestone in the field of cloud computing by integrating artificial
intelligence (Varia & Mathew, 2014).
B. Type(s) of setting and/or how/where the (AI) is used
Amazon has used machine learning to gather data about its customers and use it to
provide better service. To achieve even better customer services, they implemented two AI
based systems named Alexa and Echo (Orr & Sanchez 2018). Alexa has been deployed in the
customer care field where Alexa would listen to the queries presented by the customers and
then reply with the most suitable solution. The objective towards creating Alexa is to provide
faster solutions to the customers by automating system. Echo is another artificial intelligence
based system that has been implemented in the wireless speakers sold by Amazon. This AI is
responsible for gather information on the customer’s music preference to create music
playlists and act to user’s voice commands by using an ‘always listening’ microphone.
C. Implementation issues reported regarding the technology
There were various implementation issues regarding the use of Alexa and Echo.
Alexa would freeze and not give any responses if it was asked a question that was not
preprogrammed into its system. This has created a very upsetting environment for its
developers, as there are a variety of questions asked by the customers on a daily basis.
Successfully incorporating every single type of query into the system along with its suitable
solution will take a huge amount of time. Machine learning evolves around human

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interaction. However, Alexa cannot be released into the live system without making
significant improvements in its query handling capabilities.
IV. Implementation Success(es)
A. How successfully company(s) using the (AI)?
Amazon has been successfully using the AI and machine learning system for years
now. In fact, it was the information gathering capabilities that has aided Amazon Inc. in
becoming the huge e-commerce giant. Echo has received many positive feedbacks from its
customers regarding its utilization. The favorite music of the uses in effortlessly shortlisted
and thus they find its uses extremely satisfying. People have also found voice command to be
one of the most ecstatic experiences as they can use Echo to control the speaker, make calls
and perform various other activities just by speaking to Echo. Alexa has also been a success
of Amazon as customers can call and get a satisfying solution from the AI within seconds.
Human interactions in the customer care system delays the response as the person has to
research before giving a response. However, with Alexa they can easily give a response by
implementing a search algorithm on its database of valid responses and provide the customer
with the appropriate one.
B. Consideration for further development & usage
Alexa and Echo definitely needs further development to be fully incorporated in a
person’s daily life and operating g independently. Alexa has to ‘learn’ a huge number of
scenarios both common and situational ones before being able to serve the customers of
Amazon with the expected quality of service. Echo on the other hand, needs an upgrade
where it can be used in computers too rather just speakers. The customers can just visit
Amazon’s website where they would be guided by Echo to make the best buying choices
possible.

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V. Conclusion(s)
A. Your opinion of their current usage
In my opinion, Amazon needs to develop their AI-based system before spreading
them globally to different customers. IoT devices can be easily hacked and abused by
attackers to gather information (Dietterich & Horvitz, 2015). Thus, these devices are harmful
to the privacy of the customers if proper security protocols are not implemented.
B. Your suggestions for possible further enhancement
Amazon must emphasize more on the security aspects of their system along with their
customer service agenda. They would suffer huge losses in reputation and financially if their
AI-based system is used by attackers to penetrate the privacy of Amazon’s customers.

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References
Amazon, E. C. (2015). Amazon web services. Available in: http://aws. amazon.
com/es/ec2/(November 2012).
AMZN Company Profile & Executives - Amazon.com Inc. - Wall Street Journal. (2018).
Quotes.wsj.com. Retrieved 23 February 2018, from
http://quotes.wsj.com/AMZN/company-people
AMZN Financial Statements - Amazon.com Inc. - Wall Street Journal. (2018).
Quotes.wsj.com. Retrieved 23 February 2018, from
http://quotes.wsj.com/AMZN/financials
Broder, A. (2018, February). A Call to Arms: Embrace Assistive AI Systems!. In
Proceedings of the Eleventh ACM International Conference on Web Search and Data
Mining (pp. 1-1). ACM.
Dietterich, T. G., & Horvitz, E. J. (2015). Rise of concerns about AI: reflections and
directions. Communications of the ACM, 58(10), 38-40.
Orr, D. A., & Sanchez, L. (2018). Alexa, did you get that? Determining the evidentiary value
of data stored by the Amazon® Echo. Digital Investigation.
Stoica, I., Song, D., Popa, R. A., Patterson, D., Mahoney, M. W., Katz, R., ... & Goldberg, K.
(2017). A berkeley view of systems challenges for ai. arXiv preprint
arXiv:1712.05855.
Varia, J., & Mathew, S. (2014). Overview of amazon web services. Amazon Web Services.