Needham analyst Laura Martin reiterated Alphabet Inc (NASDAQ: GOOGL) with a Buy and a $140 price target.
Earlier this week, the analyst hosted an interview with Tamara Zubatiy, the CEO of Barometer, a company she co-founded in 2018.
Zubatiy shared insights regarding Amazon.Com Inc (NASDAQ:AMZN) AWS and Google Cloud.
Barometer extensively uses AI and Machine Learning, integrating generative AI using LLMs hosted at AWS starting Jan 2023.
Google Cloud is attempting to lure Barometer from AWS by buying out commitments and offering cost-free use of its LLMs.
Zubatiy’s primary concerns with moving to Google Cloud include data privacy conflicts and difficulties improving generative AI outcomes.
Zubatiy worries that Google might leverage the proprietary data Barometer puts on its Cloud service to enhance its captive LLMs.
She contrasts this with AWS, which houses various companies’ LLMs and promises a “Chinese Wall” between Barometer’s data and the LLM it employs.
Zubatiy emphasizes the stickiness of LLM training. Barometer has invested heavily in training on AWS’s LLM, making the transition to Google Cloud time-consuming, even with zero costs.
The effort and time required for such a transition are significant barriers to change.
She finds that Microsoft Corp (NASDAQ:MSFT) Microsoft Cloud, and Google Bard have latency issues and conflicts of interest.
Barometer is considering creating a parallel infrastructure on Google Cloud to hedge against potential AWS price increases and to increase podcast scoring throughput.
Transitioning to Google Cloud would require 3-4 months of engineering work, even with zero costs.
Zubatiy’s strategic preference for Amazon stems from its e-commerce focus, which she finds less threatening to her ad-driven business model than Google.
While Google derives most of its revenue from advertising, Amazon’s diverse focus aligns better with Barometer’s interests.
Price Action: GOOGL shares traded lower by 0.06% at $129.62 on the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
