Amazon CEO Andy Jassy has told shareholders that heavy investment in artificial intelligence will be required to remain competitive, as the company increases its spending on AI.
The company’s capital expeditures will reach US$100 billion this year, with a majority of this being spent on AI. Amazon is developing more than 1,000 AI applications, according to Jassy.
“Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we’ve only fantasised,” wrote Jassy in his annual letter to shareholders.
“If your customer experiences aren’t planning to leverage these intelligent models, their ability to query giant corpuses of data and quickly find your needle in the haystack, their ability to keep getting smarter with more feedback and data, and their future agentic capabilities, you will not be competitive.”
Jassy also said the company would heavily invest into AI data centres, chips, and hardware for Amazon Web Services.
Amazon introduced its Trainium2 microprocessors last year, which it hopes will rival Nvidia’s chips in AI training. While not as powerful as Nvidia’s microprocessors, Trainium 2 will be used to build Amazon’s Project Rainier supercomputer cluster.
“Our new Trainium2 chips offer 30-40% better price-performance than the current GPU-powered compute instances generally available today,” Jassy said. The company projects that the cost of AI training will decrease as training becomes less frequent and AI models grow more efficient.
Trainium3 chips are due to be released in 2025, Amazon said in December.
Amazon also introduced its Nova Sonic AI model this week, which is intended to both understand and generate realistic-sounding speech.
The company has invested around US$8 billion into Anthropic, and said in February that Anthropic’s Claude AI model would be integrated into a new version of Amazon’s Alexa virtual assistant.
Amazon’s (NASDAQ: AMZN) share price closed at US$181.22, down from its previous close at $191.10. Its market capitalisation is $1.92 trillion.
Related content
