Company Background and Current Situation
Amplitude, an analytics software firm based in San Francisco, struggles with its stock price post-IPO, plummeting from an all-time high of $84.80 to around $10. This downturn is prompting a heavy pivot toward AI integration, a move aimed at revitalizing its business model. The company plans to invest tens of millions, including multiple acquisitions of AI startups, to establish itself as an ‘AI native’ company.
Defining AI Native
Becoming ‘AI native’ means embedding AI into the company’s core operations rather than layering it on top of existing processes. This approach seeks to create a system where AI underpins product development and decision-making, a shift that contrasts sharply with merely enhancing legacy systems. Companies like Amplitude aim to build a foundation where AI drives significant value propositions.
Amplitude’s AI Transformation Strategy
Since late 2024, Amplitude has acquired five AI startups, including Command AI and Kraftful. These acquisitions are part of a broader strategy to bring in specialized talent and tools essential for building a robust AI framework. CEO Spenser Skates has significantly changed his stance on AI, moving from skepticism to aggressive investment.
Leadership Changes and Cultural Shifts
Skates appointed Wade Chambers as Chief Engineering Officer and Yana Welinder as Head of AI, both with extensive backgrounds in artificial intelligence. Their roles focus on accelerating product development and overcoming employee resistance to new AI tools. Initiatives like ‘AI week’ involve comprehensive training to enhance employee engagement with AI technologies.
Broader Industry Trends
The push toward becoming AI native isn’t unique to Amplitude. A 2025 MIT study revealed that 95% of AI pilot programs yield no measurable ROI. Companies across various sectors are investing heavily in AI tools, often without clear returns, which raises questions about the sustainability of such strategies.
Challenges and Employee Sentiment
Despite the push for AI, employee skepticism remains, particularly among engineers concerned about job security and the effectiveness of AI tools. Amplitude’s strategy relies on a bottoms-up approach, encouraging grassroots adoption of AI tools to alleviate fears and demonstrate tangible benefits.
Future Outlook
Amplitude’s aggressive AI strategy could redefine its operational dynamics and market position. If successful, the company might lead in analytics, but it risks heavy losses if the expected productivity gains do not materialize. Over the next 6 to 12 months, expect significant shifts in analytics performance metrics as Amplitude attempts to leverage its AI investments.
