Amazon CEO Andy Jassy thinks firms ought to make investments “aggressively” in AI now to reap the total monetary rewards sooner or later.
In his annual letter to Amazon shareholders revealed Thursday, Jassy mentioned “substantial capital” is required to maintain up with the tempo of AI innovation and buyer demand for AI merchandise. He added that Amazon, too, must spend this cash now if it hopes to see robust returns on its funding years down the road.
Jassy’s feedback come after Amazon introduced plans throughout its fourth-quarter earnings name in February to spend greater than $100 billion on capital expenditures in 2025. The “overwhelming majority” of that sum shall be put towards AWS AI capabilities, Jassy mentioned on the time.
“We proceed to imagine AI is a once-in-a-lifetime reinvention of every thing we all know,” Jassy wrote in his shareholder letter. “The demand is in contrast to something we’ve seen earlier than, and our prospects, shareholders, and enterprise shall be well-served by our investing aggressively now.”
Jassy mentioned the most important AI bills are presently information facilities and chips, however he added that, over time, this infrastructure will begin to value much less.
“In AWS, the sooner demand grows, the extra information facilities, chips, and {hardware} we have to procure (and AI chips are way more costly than CPU chips),” Jassy wrote. “We spend this capital upfront, regardless that these belongings are helpful for a few years.”
Jassy provided Amazon’s personal Trainium2 chips for example that costs will go down for AI infrastructure over time. He added that these chips provide 30%-40% higher price-performance than the present GPU-powered computing cases typically obtainable right now. Trainium2 was launched in late 2024.
Jassy additionally mentioned that AI value dynamics will change sooner or later because the coaching prices for AI come down and cash is as an alternative put towards inference, or truly serving AI fashions.
“We really feel robust urgency to make inference inexpensive for patrons,” Jassy wrote. “Extra price-performant chips will assist. However, inference will even get meaningfully extra environment friendly within the subsequent couple of years with enhancements in mannequin distillation, immediate caching, computing infrastructure, and mannequin architectures.”
Amazon is presently constructing greater than 1,000 generative AI purposes, Jassy mentioned within the shareholder letter. He added that Amazon’s AI income is rising at “triple-digit” year-over-year percentages and represents a “multi-billion-dollar annual income run fee.”
Amazon declined to remark additional.
