Meta Platforms May Be Launching a Cloud Business: Should Amazon Be Worried?
This is nothing to fret over.
Overview
Amazon's (NASDAQ: AMZN) cloud computing segment, Amazon Web Services (AWS), is arguably its most important unit right now. It is growing its sales faster than the rest of the business, is responsible for most of its operating profits, and given the large remaining opportunity in this niche, AWS could be a key growth driver for a long time. However, what will happen to Amazon as more corporations enter the cloud industry and seek to compete with AWS? Meta Platforms (NASDAQ: META), Facebook's parent company, is reportedly exploring doing just that. Let's discuss the potential implications for Amazon.
Image source: The Motley Fool.
According to some reports, Meta Platforms' CEO, Mark Zuckerberg, is looking to launch a cloud business and sell excess artificial intelligence (AI) computing capacity. The tech leader has been investing heavily in its AI-related ambitions, and it could get a return on that investment by renting out unused GPU (Graphics Processing Unit) capacity to other corporations. This would put Meta Platforms in direct competition with several cloud leaders, including Amazon. However, the e-commerce specialist and its shareholders shouldn't be too worried. Here are three reasons why.
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Originally published at www.fool.com.