Did Amazon Just Enter the Chatbot Wars?

Amazon (NASDAQ: AMZN) is a company that has been utilizing artificial intelligence (AI) for years, and it has plenty of room to further enhance its products and services with AI in the future. It hasn't, however, been a particularly hot buy with AI investors recently (its stock is up just 8% in the past year), perhaps due to the lack of a compelling AI product or service.

That could, however, be changing. The company recently unveiled a new website for its Alexa+ assistant, which may put it in direct competition against OpenAI's ChatGPT and other chatbots.

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Amazon begins rolling out a web version of its Alexa+ assistant

Amazon's Alexa+ launched last year. The AI-powered assistant helps manage multiple Alexa devices and control smart home devices. It can even perform agentic AI tasks, such as helping to fix a home appliance, by finding a service provider and arranging the repair.

Earlier this month, it also announced it would be launching a web version of Alexa+, which will be available at alexa.com. It's rolling out to early access Alexa+ customers. And it looks to be more than simply another way for people to utilize Alexa+ to connect with and manage their devices. The website's interface looks remarkably similar to that of a chatbot's -- with options to plan, learn, create, shop, and find things.

The advantage Amazon has is that with millions of Alexa devices, it may end up being a better solution for users with smart home products than other chatbots. While it's in the early stages, it definitely seems as though Amazon may be looking to lure users away from other chatbots and onto its Alexa+ assistant.

The company continues to invest heavily in AI

Amazon has been no stranger to chatbots as it has invested $8 billion into Anthropic, which is the company behind the popular Claude chatbot.

However, that's still a drop in the bucket when you consider its overall spending. Recently, the company boosted its guidance for capital expenditures (capex) spending for 2025 to $125 billion, up from a previous forecast of $100 billion. And for the current year, the company projects to spend even more, with CFO Brian Olsavsky saying that the company believes AI is "a massive opportunity with the potential for strong returns on invested capital over the long term."

The advantage that Amazon has over OpenAI, Anthropic, and other big names involved with chatbots is that it has considerable resources at its disposal. In the trailing 12 months, Amazon has generated a staggering $76.5 billion in profit. With plenty of cash to work with and to continually invest in Alexa+ and other AI initiatives, it has the potential to equip a highly powerful and effective chatbot, if it so chooses. The big question is whether alexa.com will primarily be an option for Prime users or if the goal will be to reach a much broader base of customers.

Why Amazon stock looks like a terrific buy right now

Amazon has the ability to be a dominant player in the chatbot wars -- if it wants to be one. This is a company that is known for making strong, data-driven decisions. If it chooses to go big into developing Alexa+ for the masses, that's a good sign that it sees opportunity there. But if it does end up focusing primarily on integrating Alexa devices and being aimed at Prime users, that may not necessarily be a bad move, either.

Last year, OpenAI's CEO Sam Altman said that the company was losing money, even on its ChatGPT Pro plans that cost $200/month. Amazon may end up balking at trying to compete head-on with ChatGPT and other chatbots, as doing so could end up hurting its bottom line.

Its investments into AI and the growth potential of Alexa+, however, should serve as reminders as to what Amazon is capable of, and why it can make for a smart AI stock to own; this isn't a company that's going to chase opportunities that don't make sense for its financials.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.