Andy Jassy Says Amazon Has Its Hand In Every Layer Of The Generative AI Stack: 'This Is Going To Transform Virtually Every Experience'

Amazon.com Inc AMZN CEO Andy Jassy believes artificial intelligence is going to transform customer experiences across the board. He’s positioning Amazon accordingly.

What To Know: Jassy was interviewed by Andrew Ross Sorkin Thursday on CNBC’s “Squawk Box” shortly after the Amazon chief released his annual shareholder letter, which was largely focused on AI. AI also took center stage in the interview.

“This is going to transform virtually every experience that we know. It’s a gigantic space and there are going to be a lot of very successful players in it,” Jassy told Sorkin on Thursday morning.

Amazon is heavily invested in Anthropic, the AI startup behind the Claude 3 family of models. The company made an initial investment of $1.25 billion in Anthropic last September and invested another $2.75 billion just last month.

Jassy told CNBC that Claude 3 is the “best model on the planet right now.” He also noted that it runs best on top of Amazon Web Services.

Amazon makes Anthropic models easily accessible through its Bedrock platform, which offers a fully managed service that makes foundation models from leading AI companies available through its application programming interface. Anthropic is also training its future models on Amazon’s Trainium and Inferentia chips, and has even named Amazon its primary cloud partner, Jassy said.

Amazon is also building its own large language models and is seeing increasing interest from customers. According to Jassy, “more and more customers” are opting for Amazon’s services.

“We have a lot of experience building models at the company. We’ve been doing it for a long time … these Titan models that we have, we’re going to keep building those and we’re going to give people choice,” Jassy said.

Check This Out: Amazon Phases Out Developer Incentives, Embraces AI to Revitalize Alexa’s Competitive Edge

Why It Matters: Jassy told CNBC that most people are focused on the applications aspect of generative AI, largely due to the popularity surge of ChatGPT, but he actually sees three “gigantic” macro areas in the generative AI stack.

He explained that he looks at AI as being multi-layered. At the lowest level, you’ve got people building their own large language models that need compute to train the models and run predictions and inferences. What really matters at this lowest level are chips and services, he said.

Most of the early AI models were powered by Nvidia Corp NVDA, but supply has become more scarce and costs have gone up, which has prompted Amazon to build its own custom silicon chips. Those chips are “meaningfully more price performant” than other options out there, Jassy said.

At the middle layer of the stack, you’ve got people who are looking to leverage someone else’s model to offer products customized with their own data, he said. Amazon’s Bedrock offers solutions for the middle layer and is the easiest way to build a high-quality generative AI application.

That’s where applications come into play. At the top layer of the stack, applications are built on these models. Jassy told CNBC that Amazon is building a lot of these applications themselves, but noted that the vast majority of applications will be built by third parties.

“We’re optimistic that a lot of them will be built on AWS,” Jassy said.

See Also: Producer Inflation Shows Mixed Signals In March, Keeps Risks Of High-For-Longer Interest Rates Alive

AMZN Price Action: Amazon shares are making new all-time highs on Thursday. The stock was up 0.80% at $187.44 at the time of publication Thursday, according to Benzinga Pro.

Photo: Wikimedia Commons.