Amazon CEO Justifies Large AI Investments As 'Once-In-A-Lifetime Reinvention Of Everything We Know'

Amazon.com, Inc. AMZN CEO Andy Jassy gave some insight into the company's artificial intelligence strategy in his annual letter to shareholders released Thursday. 

The Details: Jassy outlined the company's strategic focus on generative AI as a transformative force and emphasized its potential to “reinvent virtually every customer experience.” 

He highlighted the need for substantial capital to secure AI chips and build data centers, calling these investments “proactive” and beneficial for customers, shareholders and long-term growth. 

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"We continue to believe AI is a once-in-a-lifetime reinvention of everything we know, the demand is unlike anything we've seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now," Jassy wrote to shareholders. 

The Amazon CEO stressed a "strong urgency to make inference less expensive for customers' pointed to the company's new Trainium2 chips as 30% to 40% less expensive than currently available GPU options. He predicted that more affordable AI training will ultimately lead to more overall AI spending and translate into a profitable business segment much like AWS. 

"It's like what happened with AWS. Revolutionizing the cost of compute and storage happily led to lower cost per unit, and more invention, better customer experiences, and more absolute infrastructure spend," he wrote. 

Jassy reiterated the need for large capital investments during the current period of "high demand" in order to remain competitive in the rapidly changing AI landscape. 

"It won't all happen in a year or two, but it won't take 10 either. It's moving faster than almost anything technology has ever seen," Jassy said. 

AMZN Stock Price Action: According to Benzinga Pro, Amazon shares are down 5.30% at $180.98 amid a broad market sell-off at the time of publication Thursday.

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