Inside Andy Jassy’s Plans for AI at Amazon
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In today’s big story, we’re looking at Amazon CEO Andy Jassy’s letter to shareholders, which details the tech giant’s plan in the age of generative AI.
What’s on deck:
But first, Amazon, AI, and a letter.
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The big story
Amazon in the AI age
The generative AI revolution is coming, and Amazon wants in on the ground floor.
Andy Jassy, Amazon’s CEO, identified the tech as the company’s next big focus in his annual letter to shareholders, writes Business Insider’s Ana Altchek.
Jassy described gen AI as Amazon’s “next set of primitives,” which is corporate jargon for saying Amazon wants companies getting into gen AI to build stuff using their tools.
It’s a strategy that’s worked well for Amazon in the past. AWS, Amazon’s public cloud business that Jassy helped create, has been incredibly profitable and upended how companies think about their tech strategy.
But there’s a new kid on the block. The AI cloud includes Nvidia’s GPUs and large-language models, which power the AI services and tools that are all the rage now. Meanwhile, the cloud 1.0 business, which AWS has long dominated, is no longer cool.
Jassy’s letter details how Amazon plans to reposition itself at the forefront of this new era.
The three-layer approach includes Amazon powering companies that build and train models (Anthropic, Snap), helping companies use these models with their data (Bridgewater Associates, Pfizer), and creating customer-facing AI applications themselves.
It wasn’t all AI talk in Jassy’s letter.
I asked our resident Amazon expert, Eugene Kim, about what stood out to him beyond the mentions of AI. He highlighted two points:
A lower cost to serve. Jassy emphasized the company would continue to find cheaper ways to deliver items faster. That’s a nod to the threat Amazon feels from fast-fashion retailer Shein. It also enables Amazon to increase its market share among customers looking for cheap, daily items that might have previously been costly for Amazon to ship.
Prime Video gets some love. Amazon’s streaming business has been on a rocky road recently, with layoffs hitting the unit earlier this year. But Jassy’s hopes remain high. He said in the letter he believes Prime Video could “be a large and profitable business on its own.”
Exclusive content on the streamer has been a mixed bag. Its latest big bet is “Fallout,” an adaptation of the popular video game set in a post-apocalyptic world. (Hmmm, what a novel concept.) Meanwhile, Prime Video’s pursuit of sports remains a question mark.
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What’s happening today
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Today’s earnings: JPMorgan Chase, Citigroup, Wells Fargo, and other companies are reporting.
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Coachella starts today.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London.
