Shares of Amazon (NASDAQ:AMZN) fell as much as 3% on Wednesday morning, despite broader Nasdaq strength, as investors voiced concerns over potential AI market share erosion to Oracle (NYSE:ORCL).
The e-commerce and cloud computing leader’s stock declined while Oracle surged 40% following a strong quarterly performance. Analysts note that Oracle’s neutral stance in the AI sector has become a competitive edge over Amazon Web Services (AWS).
Unlike some rivals, Oracle is not developing proprietary large AI models that might compete with its clients. This neutrality has allowed the company to form partnerships with major tech players including Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), and even Amazon itself, enabling Oracle databases to operate within these cloud environments.
Oracle’s client base includes Meta Platforms (NASDAQ:META) and Elon Musk’s xAI, both aiming to challenge established AI leaders. As the AI landscape shifts from model training to inference—generating outputs from pre-trained models—Oracle is well-positioned with its new database that integrates leading AI models with private datasets.
Cleveland Research highlighted this competitive environment, stating that “Market share feedback continues to favor MSFT, GOOG, and ORCL while AMZN appears to be underperforming.” The analysts added that Oracle “appears best positioned for large AI training and sovereign cloud deals” while Amazon partners “appear to be tracking more in-line with targets.”
The firm attributed Amazon’s underperformance to factors including increased multi-cloud adoption, a slower AI ramp, and heightened attention to ongoing infrastructure modernization projects.
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