Amazon spends less on warehouses, more on AI

• Amazon has made a commitment to investing in AI amid growing interest in technology.
• Amazon CEO Andy Jassy told analysts it plans to develop “the world’s best personal assistant.”
• The company is reducing spending on fulfillment and transportation, according to the company’s chief financial officer (CFO).

Amazon is doubling down on artificial intelligence as it spends less on warehouses and other parts of its logistics infrastructure, which grew exponentially after the pandemic.

In a call with analysts on Thursday, Brian Olsavsky, Amazon’s chief financial officer, said: “The core fulfillment and transportation sectors are actually spending less year-over-year, and their estimates are lower. “And we are adding more budget to large language models and generative AI.”

“So we are creating space in fulfillment numbers and transportation numbers that are being repurposed to AWS,” he said, referring to Amazon Web Services, which provides AI and machine learning services to Unicorn customers such as Stability AI and Hugging Face. he said.

According to Amazon’s 2022 annual report, the company spent about $58.3 billion in capital expenditures last year, a figure that shows the company’s focus on developing its “technology infrastructure.” points out.

Amazon CEO Andy Jassy agrees with company’s AI efforts, e-commerce giant prioritizing development of large-scale language models, the technology behind generative AI tools like chatbots He said it would be one of the few companies.

“When you look at the major large-scale language models that really matter, they take years to build and billions of dollars to build,” he told analysts on Thursday. There are a handful of companies that want to invest their money in, and we’ll be one of them with Amazon.”

Jassy added that he finds generative AI tools to help coders the most “glamorous” and believes Amazon is also aiming to develop “the world’s best personal assistant.”

Referring to Amazon’s voice assistant device Alexa, he said:

“I think this will rapidly accelerate our vision of becoming the world’s best personal assistant,” he added.

Amazon’s stock rose more than 10% in after-hours trading, but the company was “cautious about spending in this uncertain time” on cloud services until the end of the company’s conference call, when Jassy said. It gave up those gains to. Still, the stock is up more than 25% so far this year.