“Right-sizing is a common strategy among model developers, who are releasing LLMs in multiple sizes to suit diverse use cases and on-device constraints. Zoho’s strategy of creating “right-sized” and efficient AI models will allow the company to make cost and compute-efficient offerings a key part of its value proposition,” said Mohit Agrawal, research director of AI & IoT at Counterpoint Research.

Zoho’s full-stack AI bet

Zoho’s approach with Zia LLM differs from enterprise AI rivals like Microsoft’s Copilot, Salesforce’s Einstein, and Google’s Gemini as the company owns the full AI stack. While most competitors integrate third-party foundation models, Zoho’s models are trained, deployed, and run entirely on its own infrastructure and cloud.

“Training your own models is technically complex, resource-intensive, and rare among software companies,” said Chirag Mehta, vice president and principal analyst at Constellation Research. “Zoho’s decision to build its own LLMs is rooted in its strategy to maintain independence and flexibility. It reduces dependencies on hyperscalers while still allowing integration when customers want it. Since outcomes from LLMs are tightly linked to context and data, Zoho’s early investment positions it to deliver differentiated, domain-specific intelligence where it already has deep experience.”

The artificial intelligence (AI) revolution is well under way. The AI market was valued at around $190 billion in 2023. By 2033, however, the United Nations predicts the market will be worth nearly $5 trillion.

Fortunes will be made over this time period, sending investors on a determined search to find the next big AI stock. The overlooked AI stock below, however, may be your best long-term bet.

This famous company is actually an AI giant

Most consumers think of Amazon (AMZN 0.39%) as an e-commerce business. And that’s true. Last year, most of Amazon’s revenues came from e-commerce sales and support. When you look at operating profits, however, the picture changes. Most of the company’s operating profits last year didn’t come from e-commerce. Instead, it came from a valuable business segment called Amazon Web Services — more commonly referred to as AWS.

Last quarter, AWS revenue jumped by 17% year over year. E-commerce sales in North America, meanwhile, rose by just 8%, with international e-commerce sales rising by just 5%. But it’s really AWS’ profitability that is most impressive. The segment’s operating profits last quarter jumped to $11.5 billion, with record operating margins of around 39.5%. Companywide operating profits, meanwhile, totaled just $18.4 billion, making AWS the most critical component to Amazon’s near-term and long-term profitability.

What is causing AWS to grow so quickly and experience such impressive profitability? There’s one major cause: the rise of artificial intelligence.

AI companies don’t typically build out their own infrastructure to train and run their models. Instead, they effectively rent out space from cloud infrastructure providers. Most estimates still peg AWS as the largest cloud infrastructure providers in the world, with a market share of around 30% — nearly as much as the next two competitors combined. Rising demand and spending for AI services, therefore, result in a direct increase in demand for AWS services.

Two reasons why Amazon is your best AI stock pick

A lot of money will be made over the next decade with AI stocks. But as previous cycles like the dot-com bubble have proven, not all AI companies will end up winners. That’s what makes investing in Amazon so appealing right now. AWS isn’t an idea — it’s a reality. Amazon already has incredible scale in the cloud-computing world, with arguably greater investment power than any of its competitors.

But it’s not just Amazon’s existing scale that should get investors interested. Due to the size of Amazon’s e-commerce division, Amazon’s AWS division is arguably undervalued. As one Wall Street analyst commented this week, “We believe AI is a key driver of digital transformation and that AI can help drive AWS growth to accelerate, as the AWS opportunity remains underappreciated.” For years, other analysts have been calling on AWS to be spun off into a separate business entity in order to realize its full value.

Whether or not a spin-off occurs, AWS will continue to become a bigger part of the Amazon story. Because AWS has higher margins and growth rates than the e-commerce division, this shift should help the stock’s overall valuation. Amazon isn’t the trendiest AI stock to buy right now, but it likely offers one of the best balances between risk and reward. The rise of AWS could persist for years, if not decades, generating impressive lifetime returns for patient shareholders.

Artificial intelligence is reshaping the future — but not without a cost. A new report by the White House Council of Economic Advisors warns that AI and cloud computing may drive up electricity prices dramatically across the United States unless urgent investments are made in power infrastructure.

The study highlights a significant shift: after decades of minimal electricity demand growth, 2024 alone saw a 2% rise, largely attributed to the surge in AI-powered data centers. The International Energy Agency (IEA) projects that by 2030, data centers in the US could consume more electricity than the combined output of heavy industries such as aluminum, steel, cement, and chemicals.

Productivity Promises VS Power Pressures

Despite the looming challenges, the report does not discount AI’s potential benefits. If half of all US businesses adopt AI by 2034, labor productivity could rise by 1.5 percentage points annually, potentially boosting GDP growth by 0.4% that year. But that promise comes with a price.

To meet the surge in demand, especially when factoring in industrial electrification and efforts to reshore manufacturing, the US would need to invest an estimated 1.4 trillion Dollars between 2025 and 2030 in new electricity generation. That figure surpasses the industry’s investment over the past decade. The study cautions that without the emergence of lower-cost power providers — such as renewables or advanced nuclear — electricity bills will rise sharply.