As Amazon, which was founded by Jeff Bezos in 1994, set out its full-year results on Thursday, it said it will invest in “AI, chips, robotics and low earth orbit satellites”. <\/p>\n
Amazon’s chief executive, Andy Jassy, was clear on a call with financial analysts that the bulk of its spending will go towards AI. “It’s an unusual opportunity,” Jassy said of AI, suggesting it will become profitable in the future.<\/p>\n
“I passionately believe every customer experience we have today will be reinvented by AI. We’re going to invest aggressively,” Jassy added.<\/p>\n
However, investors are concerned about the scale of spending on AI and when companies will start to see a return. <\/p>\n
Like Amazon, the likes of Meta and Microsoft also saw their share prices fall this week.<\/p>\n
Mary Therese Barton, chief investment officer at Pictet Asset Management, told the BBC there were “certainly jitters”.<\/p>\n
She said: “It has definitely been a bit of a rupture and a bit of a wake up call as well, in terms of ‘are these investments in AI going to come good?’.”<\/p>\n
Late last year, the governor of the Bank of England warned that major tech firms could face a “sharp correction” in their valuations<\/a>, saying share prices in the US are reminiscent of those before the dotcom bubble burst in the early 2000s.<\/p>\n The boss of US tech giant Cisco told the BBC that the transition to AI will create winners, but warned there will be “carnage along the way<\/a>“. <\/p>\n Chuck Robbins said the technology will be “bigger than the internet”, but the current market is probably a bubble and some companies “won’t make it”.<\/p>\n And Jamie Dimon, boss of one of America’s biggest banks, JPMorgan Chase, said some of the money invested in AI would “probably be lost”.<\/p>\n Brian Olsavsky, Amazon’s chief financial officer, noted that the company was looking at cost reductions elsewhere as it ramps up spending.<\/p>\n Last week, Amazon laid off another 16,000 workers<\/a> after cutting 14,000 roles in October<\/a>.<\/p>\n Leaders of other companies joining the AI rush have struck a similar tone.<\/p>\n