Amazon Using AI to Drive Faster Delivery

Amazon delivery

Amazon is reportedly using artificial intelligence in its inventory system to speed deliveries.

Stefano Perego, Amazon’s vice president of customer fulfillment and global ops services for North America and Europe, said in an interview with CNBC Monday (May 15) that the company had begun employing artificial intelligence (AI) to determine where to place inventory.

“So now, I’m pretty sure you’re familiar with the vast selection we offer to our customers,” Perego said. “Imagine how complex is the problem of deciding where to place that unit of inventory. And to place it in a way that we reduce distance to fulfill to customers, and we increase speed of delivery.”

According to the report, Amazon has been at work on a “regionalization” project to ship merchandise to customers from warehouses nearest them instead of from another part of the country. It’s an effort that requires technology that can study data and patterns in order to plot out what products will be in demand and where.

With AI, Amazon can make that happen, sending products that are closer to customers to their destination via same-day or next-day delivery. The report said this effort has progressed well, with three quarters of products now coming from fulfillment centers within a customer’s region.

Amazon’s use of AI comes amid a number of other efforts by tech giants to incorporate the technology into their products. As PYMNTS has written, the term “AI” was brought up hundreds of times across recent earnings calls by Meta, Microsoft and Alphabet.

For example, Alphabet’s Google last week used its annual I/O developer conference to showcase new integrations of AI features across practically all of its core products.

“Observers, as well as investors, viewed the AI-centric unveiling as the latest salvo in an ongoing battle between Alphabet Inc.’s Google and its tech sector competitors, like Microsoft,” PYMNTS wrote.

The same report noted that Microsoft is already licensing AI technology, including OpenAI’s popular ChatGPT solution, across its suite of consumer and enterprise software products.

“We’re at an exciting inflection point,” CEO Sundar Pichai told the 2023 I/O attendees. “[Google has] an opportunity to make AI even more helpful for people, for businesses, for communities, for everyone.”

And on the same day Google was rolling out its AI products, Robinhood Markets Co-founder and Chief Executive Officer Vlad Tenev told investors during that company’s first quarter 2023 earnings call, “Every company will have to transition into an AI company.”

“The companies that have been able to move ahead throughout history and create differentiated value have been the technology companies,” Tenev said. He added that in the same way “every company today needs to be a technology company,” every company in the future will have to become an AI company.

“The impact of AI and other tools that we’ve seen thus far is going to be extraordinary,” said Tenev.

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