Amazon chief executive urges ‘aggressive’ AI investment in shareholder letter

Amazon’s chief executive officer Andy Jassy has defended the company’s massive investment in artificial intelligence, saying it is essential for future competitiveness as he outlined his vision in his annual letter to shareholders.

“If your mission is to make customers’ lives better and easier every day, and you believe every customer experience will be reinvented by AI, you’re going to invest deeply and broadly in AI,” Jassy wrote in the letter released on Thursday.

The technology giant has earmarked up to $100 billion this year on capital expenditures, with most going towards AI-related projects as the company races to meet growing demand for generative AI services.

“Our customers, shareholders, and business will be well-served by our investing aggressively now,” he added.

Jassy predicted that AI costs will eventually decrease, noting that “AI does not have to be as expensive as it is today, and it won’t be in the future.” He cited more price-performant chips and improvements in computing infrastructure as factors that will reduce costs over time.

The chief executive also revealed that more than 1,000 generative AI applications are being built across Amazon, aimed at transforming customer experiences in shopping, coding, personal assistants, streaming video, healthcare and other areas.

“Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we’ve only fantasised,” Jassy wrote, adding that the technology is “moving faster than almost anything technology has ever seen.”

In a CNBC interview following the letter’s release, Jassy addressed concerns about potential US import tariffs, particularly those targeting goods from China. He said Amazon has pulled forward some inventory orders and is working to keep prices low, but added the company has not yet seen meaningful impact on consumer demand.

“People have not stopped buying. There’s certain categories where we do see a little bit of people buying ahead, but it’s hard to know if it’s just an anomaly,” he said.

Jassy also emphasised Amazon’s need to operate like “the world’s largest startup” that moves quickly without bureaucracy. He revealed the company has received almost 1,000 employee emails about bureaucracy examples and has made over 375 changes based on that feedback.

“Builders hate bureaucracy,” he wrote. “It slows them down, frustrates them, and keeps them from doing what they came here to do.”