Amazon's Big Tech Shake-Up: AI Push, Cloud Struggles & The End of Chime--What It Means for Investors

As Amazon axes Chime and Inspire, its AI-powered Alexa is set to take center stage. Is this a game-changer?

Author's Avatar
Feb 20, 2025
Summary
  • Amazon ditches Chime, doubles down on AI, and faces cloud pressure—investors, here’s what you need to know.
Article's Main Image

Amazon (AMZN, Financial) is cleaning house. The tech giant just announced it's shutting down Chime, its in-house video conferencing service, by 2026—new customers are already locked out starting this week. This move comes days after Amazon axed Inspire, its TikTok-style shopping feed, signaling a clear shift in focus. But the real buzz? Amazon is gearing up to unveil its long-awaited AI-powered Alexa upgrade later this month. With the company doubling down on AI, this could be a pivotal moment for its next wave of innovation.

Meanwhile, AWS reported a solid 19% revenue jump to $28.79 billion last quarter—but it still missed estimates of $28.87 billion. Amazon isn't alone in feeling the squeeze; Microsoft (MSFT, Financial) and Google (GOOG, Financial) also reported softer cloud growth as businesses pull back on tech spending. This tightening cloud market is forcing even the biggest players to rethink their strategies, and Amazon's latest moves suggest it's streamlining operations to stay ahead.

For investors, the message is clear: Amazon is cutting the fat and betting big on AI and cloud computing. The phase-out of legacy services hints at a sharper focus on high-growth areas, and with its generative AI-powered Alexa about to drop, the company is aiming to redefine its competitive edge. Whether this strategy pays off will depend on how well Amazon executes in an increasingly crowded AI space.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure