Jassy said that while investment spikes invite scrutiny, AI is a game-changer that will reinvent every customer experience.<\/p>\n
\u201cI\u2019ve followed the public debate on whether this technology is over-hyped, whether\u00a0we\u2019re\u00a0in \u2018a bubble,\u2019 and if the margins and ROIC [return on invested capital] will be appealing. My strong conviction, at least for Amazon, is that the answers are no, no, and yes,\u201d Jassy said in the letter.<\/p>\n
Jassy said during a February earnings call that Amazon expects to invest about\u00a0$200 billion\u00a0in\u00a0capital expenditures<\/a>\u00a0this year to add capacity for AI and core cloud workloads.<\/p>\n In Thursday\u2019s letter, Jassy said AI is being adopted more quickly than any previous technology,\u00a0Amazon Web Services<\/a>\u00a0(AWS) is in the middle of this \u201cland rush\u201d and is being selected by companies for AI, AWS could be growing even faster if it had more power capacity, and the company\u2019s chips business will be much larger than most people think.<\/p>\n \u201cHaving our own hotly demanded chip opens up many possibilities, but perhaps none larger than the ability to lower costs for customers and secure better economics for AWS,\u201d Jassy said. \u201cAt scale, we expect\u00a0Trainium<\/a>\u00a0will save us tens of billions of capex dollars per\u00a0year, and\u00a0provide several hundred basis points of operating margin advantage versus relying on others\u2019 chips for inference.\u201d<\/p>\n Advertisement: Scroll to Continue<\/p>\n Amazon\u2019s annual revenue run rate for its chips business, which includes\u00a0Graviton<\/a>, Trainium and\u00a0Nitro<\/a>, is over\u00a0$20 billion\u00a0and growing triple-digit percentages year over year, Jassy said.<\/p>\n \u201cIf our chips business was a stand-alone business, and sold chips produced this year to AWS and other third parties (as other leading\u00a0chips\u00a0companies do), our annual run rate would be ~$50 billion,\u201d Jassy said.<\/p>\n Amazon has customer commitments that make its capex investments predictable, Jassy added.<\/p>\n \u201cWe are willing to make large capex investments and endure short-term FCF [free cash flow] headwinds for the substantial medium to long-term FCF surplus,\u201d Jassy said. \u201cAI is a once-in-a-lifetime opportunity where the current growth is unprecedented and the future growth even bigger.\u201d<\/p>\n Outlining developments across Amazon\u2019s businesses, such as retail, cloud computing services, advertising and autonomous ride-hailing service, Jassy said AI will play a role in all of them.<\/p>\n \u201cAcross all of this, AI is not a standalone initiative\u2014it\u2019s a multiplier,\u201d Jassy said. \u201cIt will reshape every customer experience we offer and unlock entirely new ones.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Jassy said that while investment spikes invite scrutiny, AI is a game-changer that will reinvent every customer experience.…\n","protected":false},"author":2,"featured_media":390345,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,3468,52875,218,219,3937,61,60,43,179,80,181],"class_list":{"0":"post-390344","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-amazon","10":"tag-andy-jassy","11":"tag-artificial-intelligence","12":"tag-artificialintelligence","13":"tag-digital-transformation","14":"tag-ie","15":"tag-ireland","16":"tag-news","17":"tag-pymnts-news","18":"tag-technology","19":"tag-whats-hot"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/390344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=390344"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/390344\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/390345"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=390344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=390344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=390344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}