Microsoft co-founder Bill Gates remains bullish on tech and what artificial intelligence (AI) could do for the world. To say he thinks it could improve things for businesses and individuals is an understatement. He expects it to be a game changer. He also believes the use of a digital assistant could potentially render some aspects of Amazon's (AMZN -1.64%) business obsolete.
Will people never need Amazon's site again?
In a recent interview, Gates hyped the importance of a personal assistant, believing that this could be the big upcoming battle for the tech giants.
"Whoever wins the personal agent, that's the big thing, because you will never go to a search site again, you will never go to a productivity site, you'll never go to Amazon again," Gates told CNBC.
That doesn't mean that Amazon's business will no longer be necessary. Instead, Gates appears to be suggesting that a virtual assistant could eliminate the need to go to the site to search and make a purchase. If that truly becomes the case, it could have a negative impact on Amazon because people would not see its site ads or promotions.
Why Bill Gates is wrong
Microsoft had a personal assistant before. In its Office applications, it was known as Clippy and often got in the way more than it helped. Any new personal assistant would be light years ahead of Clippy, but I suspect the new AI could meet the same sort of end.
Aside from executives who need personal assistants to do their day-to-day tasks, the vast majority of people don't truly need them. And shopping, whether it's online or in-person, isn't some chore that consumers are eager to get rid of.
If that were the case, online shopping would have killed retail years ago. And yet, Costco Wholesale continues to generate strong growth numbers. Its stores are continually packed and full of customers who enjoy the company's treasure-hunting experience that more often than not leaves consumers spending much more money than they had planned.
Online shopping simply provides consumers with another avenue to hunt for deals. Amazon's site makes it even easier to do so because it offers recommendations and suggestions based on consumer buying habits. The success of that model is a key reason why the tech-giant's sales continued to soar over the past decade.
AMZN Revenue (Annual) data by YCharts.
Having an AI assistant shop for someone could take that treasure-hunting experience away. I'm not confident that's what consumers really want.
AI can enhance Amazon's business
Amazon has its own assistant, Alexa, which can already help consumers place online orders. And through the use of AI, the company can offer customers a better overall experience.
One of the things Amazon is working on is improving its logistics and accelerating delivery times. It already uses robotics in fulfillment centers, and with more advanced AI, automation may become even more prevalent. AI can also help Amazon manage its inventory to better predict where its products need to be located to improve shipping times.
These are just a few examples of how AI can be a net positive for Amazon's business, but there will undoubtedly be many more opportunities.
If you're bullish on AI, should you buy Amazon's stock?
Amazon is a business that can benefit greatly from AI. Since it already has so much data from buyers and sellers, it can always benefit from having more analysis of all that information. If it can use AI to do that work, it frees up resources while potentially generating valuable insights and improving important metrics like delivery times and customer satisfaction.
I don't expect AI to eliminate the need or desire for consumers to visit Amazon's site. It will likely just enhance the overall experience. Although it's not in the news for working on a big-name chatbot like ChatGPT, Amazon is one of the companies that can gain the most from the emergence of next-gen technologies. If you're bullish on AI, then Amazon is a growth stock you may want to consider buying and holding for the long haul.
