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What Twitch deal reveals about Amazon: Investor

Amazon's $970 million deal to buy Twitch Interactive, a video platform for gamers, shows the e-commerce and media giant's "aspirations to be in live entertainment," the largest investor in Twitch told CNBC on Tuesday.

"Not many people have built a live video site with such a big community around the Internet," said Bessemer Venture's Ethan Kurzweil, who backed Twitch in its earliest days. He's the son of the famous futurist, Ray Kurzweil.

Twitch has more than 55 million users who engage in broadcasting their video game play and watching others play video games.

"If you think about playing video games as a teenager and passing the controller around in the living room and watching people play, it's something people do already. This just brings that experience online," Ethan Kurzweil said in a "Squawk Box" interview. "People want to watch the best people in the world achieving things and do things, or watch their friends play."

Read MoreAmazonsnaps up video start-up Twitch

Attendees walk past televisions showing live streams of Twitch Interactive's video service during the E3 Electronic Entertainment Expo in Los Angeles.
Patrick T. Fallon | Bloomberg | Getty Images
Attendees walk past televisions showing live streams of Twitch Interactive's video service during the E3 Electronic Entertainment Expo in Los Angeles.

In the lead-up to the deal, there were months of unconfirmed rumors that Google wanted to buy Twitch as a complement to YouTube, where lots of video recordings of people playing videos games are also watched and uploaded.

Kurzweil did not comment on the Google speculation. But he said he liked the Amazon deal because of its commitment to allowing Twitch to operate independently "and leaving the team in place there to run the company."

The Kurzweil name is synonymous in Silicon Valley with innovation. Ray Kurzweil is the director of engineering at Google. Before going into venture capital, Ethan worked at Linden Lab, which created of the virtual world game "Second Life."

Read MoreComputers will be like humans by 2029: Ray Kurzweil

As a nod to his father's work with artificial intelligence, Ethan Kurzweil jokingly assured "Squawk Box" viewers Tuesday that he's not part computer. But he told the interviewers in New Jersey on remote from San Francisco that he felt like a robot because it was so early.

—By CNBC's Matthew J. Belvedere

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