In the letter, Jassy explained the company's strategy for generative AI, building an underlying “fundamental” AI model rather than building a consumer-facing application that directly competes with popular tools such as OpenAI's ChatGPT. explained how they are focused on selling to businesses. Customers already include Delta Air Lines, Siemens and Pfizer, Jassy said.
When ChatGPT debuted a year and a half ago, it started an arms race between big tech companies and a wave of startups to figure out how to build the best AI technology and make money from it. Billions of dollars have been spent, and companies like Google, OpenAI, and Anthropic AI are releasing increasingly capable AI bots. However, companies have struggled to find the right way to integrate AI into their existing products, and so far most consumers have not actually started spending money on the AI tools already available.
Amazon is also spending billions of dollars on generative AI. The company recently invested an additional $2.75 billion, bringing its total investment to $4 billion and a minority stake in the startup Anthropic. As part of the deal, Anthropic will run on Amazon Web Services, and Amazon will be able to provide enterprise customers with access to Anthropic's Claude, one of its leading generative AI models.
The company has added AI expert Andrew Ng, who is acclaimed as an AI pioneer. A former chief researcher at Chinese internet company Baidu joined the company's board of directors as of Thursday. We are also investing billions of dollars in developing the data centers needed to fuel the growth of artificial intelligence technology.
But while Amazon is clearly seeking a path to dominance in the AI space, it has so far struggled to develop consumer products that resonate with customers. Earlier this year, the company released Rufus, a shopping assistant, but it failed to significantly improve the existing search-based shopping experience. Development of a “smarter, more conversational” Alexa assistant has also stalled, and although it was announced in September, it has not yet been released to customers.
Amazon's stock has risen 25% so far this year, but the company has yet to fully recover from its pandemic-induced spending overspending. After laying off more than 27,000 employees from 2022 to 2024, the company continued its layoffs last week, removing the cashier-less checkout program Just Walk Out from Amazon Fresh grocery stores. The company has eliminated hundreds of AWS positions focused on
In his letter, Jassy said he expects continued cost reductions due to efficiencies, particularly in the fulfillment and logistics sector. “We challenged every rigid belief in our fulfillment network and reevaluated every part of it. As a result, we believe we can deliver to customers faster while further reducing costs.” I’ve identified several areas where I can,” he wrote.
(Amazon founder Jeff Bezos owns the Washington Post.)
