Amazon Bets on In-House AI Stack as Walmart Amplifies Workforce

Jeff Bezos is getting married this weekend. The Amazon founder has spared no expense, reportedly buying out much of the luxury accommodations in Venice, Italy, for his wedding to Lauren Sanchez.

But while the tech billionaire’s splashy nuptials have captured the pop culture headlines, business news this week reveals that Amazon and Walmart continue to do battle over the future of retail, where a realignment is under way.

This realignment is not just about who sells what to whom; but how, why and with what consequence. Despite their shared ambitions, Amazon and Walmart are following different scripts.

Amazon’s DNA is rooted in platform thinking: build once, scale infinitely. It owns the tech stack, the cloud infrastructure, and increasingly, the means of distribution. Its retail business is a flywheel powered by Prime, Amazon Web Services (AWS), Marketplace and now artificial intelligence (AI).

Walmart, on the other hand, is playing to its traditional strengths while modernizing aggressively. It is upgrading its headquarters to reflect a digital-first mindset, creating a more agile, tech-forward culture that can support new initiatives in data science, eCommerce and omnichannel retail. Its focus on blending in-store and digital experiences is less about transformation and more about integration.

Both companies are converging on the same outcome: frictionless commerce. Yet, the pathways they take — one engineered from code and the other from community presence — highlight the strategic diversity in retail.

Amazon and Walmart are investing heavily in AI, but they are approaching it from distinct operational philosophies.

For Amazon, AI is the engine that drives personalization, fulfillment efficiency and infrastructure optimization. Its in-house AI foundation models like Titan and its partnership with Anthropic (a multi-billion investment) exemplify a clear strategy: build and control the stack.

But recent news underscores the volatility of this approach. The departure of AWS’ vice president of generative AI after eight years, for example, highlights the fierce talent war underway in AI circles. Top-tier AI talent today is not just scarce; it’s mobile.

Meanwhile, Walmart is executing a more democratized AI strategy, embedding intelligence into the daily workflows of its 1.5 million store associates. Through tools that manage tasks, provide real-time translation and offer conversational support, Walmart is positioning AI as a workforce amplifier.

Both companies are also integrating AI into consumer-facing services. Amazon’s Ring, for example, now includes AI-powered alerts that provide contextual descriptions, such as “person with package,” instead of generic motion notifications.

Delivery speed has become table stakes in retail, and both Amazon and Walmart are accelerating investments to meet and exceed expectations.

Amazon’s latest move is a significant push into rural America, where it is expanding same-day and next-day Prime delivery to over 4,000 towns. Backed by a $500 million investment in a new Oregon mega-warehouse that stocks over 40 million items, Amazon is laying the groundwork for a more decentralized, responsive delivery model. It leverages AI to predict demand and optimize local inventory, reinforcing the company’s core logistics advantage.

Not to be outdone, Walmart is piloting a network of “dark stores” — fulfillment centers dedicated exclusively to online orders. Located in Dallas and Bentonville, Arkansas, these sites aim to provide delivery within three hours to nearly 95% of the U.S. population.

The escalation of fulfillment capabilities is being matched by an intensifying promotional calendar. Amazon has extended its Prime Day event to four days (July 8-11), prompting Walmart and Target to launch competing sales windows. Walmart+, for instance, is offering early access to deals starting July 7, a full day ahead of Prime Day. These retail tentpoles are less about clearing inventory and more about capturing customer attention and long-term loyalty.

Perhaps the most telling indicator of retail’s fluid dynamics is the behavior of the consumer. According to recent data, nearly one in four U.S. shoppers now holds memberships in both Amazon Prime and Walmart+. This is nearly double the number from 2021, suggesting that consumers are not choosing between the two behemoths — they’re using both.

Prime still dominates in discretionary spending, especially in electronics and household goods, while Walmart+ is becoming the go-to for groceries and essential items.

That said, maintaining loyalty comes at a cost. Amazon’s third-party sellers, for instance, are raising prices to cover rising expenses tied to returns fraud and fulfillment fees. Return fraud has surged, from around 5% in 2018 to over 14% in 2024, eroding margins and driving some sellers away from Fulfilled by Amazon (FBA) programs. While consumers benefit from free and easy returns, the back-end costs are real and growing.

In this high-velocity environment, adaptability is the ultimate advantage. Amazon and Walmart are both sprinting toward the future, but the race is far from over.

The post Amazon Bets on In-House AI Stack as Walmart Amplifies Workforce appeared first on PYMNTS.com.