In tech, competition is key. It forces companies to work hard on unique values and products that offer solutions where their competitors fail. With Nvidia's (NVDA) rapid AI domination, it leaves one to wonder how Amazon (AMZN) will carve a space in this market. On Opening Bid with Yahoo Finance Executive Editor Brian Sozzi, Neuberger Berman senior research analyst Daniel Flax shares that the key for Amazon is 'bringing a level of differentiation,' both internally and through partnerships, like with Nvidia, Intel (INTC), and AMD (AMD).

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Video Transcript

How serious do you think?

Uh, Amazon is about making its own chips.

And does that enhance the value for a business like that?

Investing in the silicon and and really bringing a level of differentiation to the chips in your environment.

So, for example, uh, inferential trainum on the artificial intelligence side graviton, where they've had a lot of success where you're able to come up with chips that give you the the cost benefit could be lower power performance that really makes sense in your environment.

I think it's incredibly important you're seeing others do that.

Google has done that very successfully.

Uh, apple does that.

And so the ability to build from the silicon up, uh I think provides a level of differentiation, a level of of stickiness, if you like.

That's powerful.

All of these companies, though, they're going to invest internally.

But of course, uh, Amazon is going to rely on partners like NVIDIA, Intel, a MD, and so you have to do both.

But the silicon differentiation, I think, is very, very valuable