Amazon CEO Andy Jassy recommends organizations provide intense investment into AI technology because they will achieve optimal financial outcomes in the future.
According to Jassy in his shareholder annual update published on Thursday the company requires significant financial capital to meet both advancing AI research and market-driven AI product needs. The CEO stated that Amazon must spend its funds today to achieve profitable returns from this investment in upcoming years.
Jassy made these remarks after the company announced its plan during the fourth-quarter earnings call in February to allocate more than $100 billion for capital expenses during 2025. According to Jassy during the announcement of that amount most of the funds would fund AWS AI capabilities.
CEO Jassy maintained in his shareholder letter that “AI represents a once-in-a-lifetime transformation of all our existing knowledge.” Our customers alongside shareholders and business will benefit tremendously from current aggressive investment activities because of exceptional market demand levels.
Jassy stated that the present-day most costly elements in AI infrastructure consist of data centers and chips yet he predicted this infrastructure would gradually become less expensive.
AWS must buy additional data centers and chips alongside hardware when customer demand increases at fast rates because AI chips cost more than CPU chips according to Jassy’s description. Our company makes this capital investment initially despite the long-term utility of these resources.
Jassy used Amazon Trainium2 chips as evidence of decreasing AI infrastructure prices into the future. These chips deliver 30%-40% better price-performance compared to GPU-powered computing instances which are accessible in the market presently. Trainium2 was released in late 2024.
Jassy forecasts a future transformation in AI pricing because the current costs of training AI models will decrease while funds shift toward the operation of actual AI models also known as inference.
The organization expresses a strong sense of need to reduce customer expenses for inference operations according to Jassy. “More price-performant chips will help. Inference efficiency is set to improve significantly during the next two years through advancements in model distillation methods alongside prompt caching technologies and updated computing systems and model architectural designs.
In the shareholder letter, Jassy claims that Amazon is creating over 1,000 generative AI-based apps. According to Jassy, Amazon’s AI income is still growing at annual rates of over 100% and produces “multi-billion-dollar annual revenue run rate” figures. Amazon refused to provide any additional comments.
