Amazon CEO Defends $80 Billion AI Investment, Cites Necessity for Survival

Amazon CEO Andy Jassy has made a rare public statement in his annual letter to shareholders, defending the company's significant investments in artificial intelligence. Jassy emphasized that in an era where every customer experience is being reshaped by AI, investing deeply in this technology is not a choice but a necessity for survival.

In his letter, Jassy stated, "If your mission is to make customers' daily lives better and easier, and you believe that every customer experience will be reshaped by AI, then you will make deep and broad investments in AI." This annual ritual by Amazon's top management underscores the company's strategic focus on AI.

Key points from the letter reveal Amazon's multi-faceted AI strategy:

Hardware Infrastructure: Amazon continues to invest heavily in the development of AI chips and the expansion of data centers, which are the foundational assets supporting AI computing power.

Technological Integration: The company plans to deeply integrate the core technology of Anthropic, an AI startup acquired for $80 billion, into its Alexa voice assistant, creating an upgraded "Alexa+" intelligent interaction system.

Product Deployment: Amazon has already launched several AI chatbots for enterprise users and plans to roll out new AI features to ordinary consumers in the coming weeks.

Jassy's letter continues a long-standing tradition at Amazon, including a copy of the first letter to shareholders written by Jeff Bezos in 1997. Unlike his predecessor, Jassy faces a more complex challenge: maintaining Amazon's core e-commerce business while keeping pace with the technological advancements in generative AI.

Jassy's statements echo those made by Sundar Pichai, CEO of Google, who announced at the Google Cloud Summit that the company would invest $750 billion in expanding data centers this year. Pichai emphasized that the opportunities in the AI era are vast and require full commitment. The alignment of these two tech giants on capital expenditure reflects a global trend in the tech industry, where resources are rapidly shifting towards AI infrastructure.

While the letter did not address the recent tariff disputes involving former U.S. President Trump and their impact on the supply chain, the stock performance provides some insights. Amazon's stock has declined by nearly 13% this year, a drop that is less severe than some competitors but worse than Microsoft's performance.

Notably, Jassy did not disclose specific financial targets in his letter, instead focusing on the technological vision. He believes that the current significant investments will ultimately translate into customer satisfaction, shareholder returns, and a competitive moat for the business. Jassy, a proponent of "long-termism," is betting that AI will become Amazon's next growth engine.