Amazon CEO Andy Jassy is urging companies to make bold investments in artificial intelligence now if they want to capitalize on its transformative potential in the future.
In his annual letter to shareholders released Thursday, Jassy emphasized that significant funding is needed to keep pace with rapid advancements in AI and increasing customer demand. He explained that Amazon is planning to commit large amounts of capital today to build the infrastructure necessary for long-term success.
This push comes after Amazon revealed in its Q4 earnings call that it expects to spend over $100 billion on capital expenditures in 2025. The majority of this spending will be funneled into Amazon Web Services (AWS), specifically its AI initiatives, according to Jassy.
“We believe AI is a once-in-a-generation technological shift,” Jassy wrote. “The momentum and customer interest we’re witnessing is unprecedented. It’s critical that we invest heavily now to best serve our customers and shareholders in the years ahead.”
He noted that the largest expenses associated with AI at this stage are data centers and advanced computing chips. While these investments require substantial upfront costs, he expects the price of AI infrastructure to decrease over time.
Jassy pointed to Amazon’s in-house Trainium2 chips, introduced in late 2024, as an example of innovation that can lower costs. He said these chips deliver 30% to 40% better price-performance than the more commonly used GPU-based systems, offering a more efficient way to power AI workloads.
He also acknowledged that while training AI models is currently expensive, that cost structure is beginning to shift. Inference—using trained models to deliver AI results—is becoming the bigger expense. Amazon is focused on reducing the cost of inference through improved chip design, better model architecture, and technologies like model distillation and prompt caching.
“There’s a strong push within AWS to make inference more affordable,” Jassy added. “We’re confident that improvements in infrastructure and AI model efficiency will help us get there.”
Currently, Amazon is developing over 1,000 generative AI tools and services, Jassy said. He highlighted that the company’s AI business is experiencing rapid growth, with revenue increasing by triple digits year over year and already generating several billion dollars annually.
Amazon has not offered further public comments regarding the letter.
