Amazon CEO outlines company’s strategy to stay competitive in the AI race

Amazon CEO Andy Jassy posits that Amazon is still very much in the artificial intelligence race, dispelling the notion that it has fallen behind Microsoft and Google, and comparing the current stage to the “hype cycle” before the “substance cycle.”

“I think most people are focused on the applications, you know, things like ChatGPT brought everybody’s awareness up, but I think of generative AI as having three macro layers,” Jassy told Jon Fortt in an interview that aired on “Closing Bell Overtime” late Thursday. “I think they’re all really big and important.”

Jassy emphasized that Amazon intends to invest in AI across the company and believes that AI programs have the potential to enhance “virtually every customer experience.” He specifically highlighted Amazon Web Services (AWS) as a business that can capitalize on the AI trend in the long run.

Earlier this year, AWS introduced Bedrock, a generative AI service that allows clients to develop their own chatbots and image-generation services using language models from Amazon and other startups. AWS has also created its own AI-specific chips, Inferentia and Trainium, which aim to facilitate the running of large AI language models in the cloud. This puts AWS in competition with Nvidia, whose semiconductors have dominated the AI chip market.

Jassy expressed confidence in AWS chips, stating that they will offer “much better price-performance than you’ll find anywhere else.” Together with services like CodeWhispherer, which generates and suggests code for developers, Jassy believes Amazon has a distinct advantage in the AI space.

While Amazon has been cutting costs and scaling back on certain ventures due to slowing sales and a challenging economic outlook, AI remains an area of significant investment for the company. Jassy has prioritized AI as a transformative technology for Amazon’s future.