Amazon ‘investing heavily’ in AI, CEO says

Amazon CEO Andy Jassy told shareholders Thursday that the company will be “investing heavily” in artificial intelligence (AI) while also noting where the company has cut costs in recent months.

In his annual letter to shareholders, Jassy said 2022 was “one of the harder macroeconomic years in recent memory,” adding that the company took steps to close physical store locations, including Bookstores and 4-Star stores, that he said were not doing enough business. He also said the company cut costs in other areas, such as closing its Amazon Fabric and Amazon Care efforts, and ultimately eliminated 27,000 corporate roles.

“There are a number of other changes that we’ve made over the last several months to streamline our overall costs, and like most leadership teams, we’ll continue to evaluate what we’re seeing in our business and proceed adaptively,” he said in the letter.

Jassy said that Amazon will be focusing on strongly investing in Large Language Models (LLM) and Generative AI. Generative AI is based on LLMs across a wide range of datasets, which Jassy said will “accelerate machine learning adoption.”

He also said that the company has been developing its own LLM, which he believes “will transform and improve virtually every customer experience.”

“I could write an entire letter on LLMs and Generative AI as I think they will be that transformative, but I’ll leave that for a future letter,” he wrote. “Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon.”

He said despite the “turbulent times,” Amazon will continue to invent and update its existing business, adding that the “best days” of the company are ahead.

Beyond AI, Jassy said that Amazon will focus investing on its grocery business, including Whole Foods Market, and will focus on investing in Amazon Business, a shopping service that would allow business and municipalities to purchase office products and other items in bulk.

“So, in closing, I’m optimistic that we’ll emerge from this challenging macroeconomic time in a stronger position than when we entered it,” he wrote.