Berkshire Hathaway (BRK.A -0.17%) (BRK.B -0.14%) chief Warren Buffett isn't exactly known for his prowess as a tech investor.

Buffett stayed on the sidelines through the dot-com boom and bust, and he's said that he doesn't know how to value tech stocks. However, in recent years, Buffett has changed his tune on the tech sector. Apple is now Berkshire's biggest holding, and the conglomerate has several other tech stocks in its portfolio.

As for artificial intelligence (AI), the Oracle of Omaha has said he doesn't understand it, but he's also called it "an incredible technological advance."

Berkshire also owns a number of AI stocks, and one of the most prominent is Amazon (AMZN 0.84%). Not only is Amazon making big moves in AI, but the stock is also trading at a significant discount, down 31% from its peak in 2021.

Let's examine what Amazon is doing in artificial intelligence before discussing whether the stock is a buy today.

A digitally generated face.

Image source: Getty Images.

Amazon's AI moves

Amazon doesn't have the highest AI profile in big tech, but it has made several key moves in the emerging field. Perhaps the biggest is its launch of Amazon Bedrock, a new cloud infrastructure service designed for scaling generative AI applications. Bedrock gives customers access to foundation models, which are used to build tools like large language models.

The company is also developing its own chips to help build generative AI programs. Amazon says its Inferentia2 chips offer the most energy efficiency and lowest cost for running the kinds of inference workloads that are popular on tools like ChatGPT. Its Trainium chips are designed for training AI models and offer massive networking power.

After announcing those initiatives in April, the company doubled down on its strategy in September, forging a strategic partnership with Anthropic, an AI company known for the Claude chatbot. As part of that agreement, Amazon will invest up to $4 billion in Anthropic, taking a minority stake in the company.

Anthropic will use Amazon's Trainium and Inferentia chips for its foundation models and will make Amazon Web Services (AWS) its primary cloud provider.

The deal should accelerate Amazon's AI initiatives, but it also seems to signal that the company is lagging behind rivals like Microsoft and Alphabet. Alphabet is also an investor in Anthropic, while Microsoft has a close partnership with OpenAI, the maker of ChatGPT.

Is Amazon stock a buy?

Amazon is down substantially from its earlier peak, making it a more affordable AI stock, and the company is becoming more aggressive in AI. However, at this point, the premise of investing in Amazon because of its potential in artificial intelligence seems questionable.

The company does use AI across its business lines, including e-commerce, advertising, and AWS. But it will likely be years before some of its more recent announcements in generative AI, such as Bedrock or its partnership with Anthropic, have an impact on the bottom line.

Beyond AI, Amazon faces a number of challenges these days. Consumer discretionary spending is down nearly across the board, which is likely to weigh on the company's performance during the holiday season. The restart of student loans should also have a negative impact on its retail business.

Additionally, growth at AWS has slowed substantially as businesses have become more cautious in the current macro environment, and a number of tech companies have announced layoffs. Profits at AWS even declined in the most recent quarter.

Amazon CEO Andy Jassy has spent much of the past year cutting costs, including laying off 27,000 employees and shuttering experimental and unprofitable businesses. These moves should give the bottom line a boost.

However, a full recovery for the stock seems unlikely until the economy is back to unrestrained expansion. Investors are better off waiting for a clear sign that the current challenges are behind Amazon before they buy the stock.