In his annual shareholder letter released Thursday, Amazon CEO Andy Jassy forecasted that rapid advancements in artificial intelligence, coupled with a more competitive chip market, will drive down the current high costs associated with AI.
‘AI does not have to be as expensive as it is today, and it won’t be in the future,’ Jassy wrote, citing reports that suggest significant improvements in technology will make AI more affordable.
With more price-performant chips, along with enhancements in ‘model distillation, prompt catching, computing infrastructure, and model architectures,’ Jassy believes the cost per unit in AI will decrease over time, enabling widespread use of AI among consumers.
He compared this trend to the growth of Amazon’s cloud services, which reduced costs for compute and storage, leading to greater innovation and spending in infrastructure.
This year, Amazon plans to allocate up to $100 billion in capital expenditures, focusing primarily on AI-related projects. As demand for generative AI surges—sparked by advancements such as OpenAI’s ChatGPT—Amazon is intensively investing in data centers and other relevant technology.
Furthermore, under Jassy’s leadership, Amazon has introduced a variety of AI products, including Nova models, Trainium chips, and a new shopping chatbot, along with enhancements to its digital assistant Alexa.
Since taking over as CEO in 2021, Jassy has led efforts to optimize Amazon’s vast business structure while continuing to invest strategically.
Despite significant layoffs totaling over 27,000 employees in recent years, Jassy emphasizes the need for Amazon to operate like a ‘world’s largest startup,’ able to adapt quickly and embrace change.
Additionally, as part of a broader initiative to reduce bureaucratic hurdles within the company, Jassy mentioned the implementation of a ‘bureaucracy mailbox’ where employees could voice concerns. He noted that nearly 1,000 emails had been received, leading to more than 375 changes based on feedback.
‘Builders hate bureaucracy,’ Jassy stated. ‘It slows them down, frustrates them, and keeps them from doing what they came here to do.’
