Amazon CEO Andy Jassy believes companies should “actively” invest in AI to enjoy full financial rewards in the future.
In an annual letter to Amazon shareholders published Thursday, Jassy said “substantial capital” is needed to keep up with the pace of AI innovation and customer demand for AI products. He added that Amazon also needs to spend this money right now.
Jassy’s comments come after Amazon announced plans to spend more than $100 billion on capital expenditures in 2025 during its fourth quarter revenue call in February. The “majority” of that total is directed towards AWS AI capabilities.
“We continue to believe that AI is a once-in-a-lifetime reinvention that we know,” Jassy wrote in a shareholder’s letter. “Demand is different from what we saw before, and customers, shareholders and businesses can be fully useful when they invest actively at the moment.”
Jassy said the biggest costs of AI are now in data centers and chips, but he added that over time, the costs of this infrastructure will begin to decrease.
“In AWS, the higher the demand, the more data centers, chips and hardware you need to source (AI chips are much more expensive than CPU chips),” writes Jassy. “These assets have been useful over the years, but they still spend this capital up front.”
Jassy has provided Amazon’s own Trainium2 chip as an example of how AI infrastructure prices drop over time. He added that these chips offer 30%-40% price performance over current GPU-powered computing instances that are commonly available now. Trainium2 was released in late 2024.
Jassy also said that the dynamics of AI prices will change in the future as AI training costs will fall and instead money will infer or actually serve AI models.
“We feel a strong urgency to make reasoning cheaper for our customers,” Jassy writes. “More priced chips will help. However, model distillation, rapid cashing, improved computing infrastructure and model architecture will make inference more efficient over the next few years.”
Amazon is currently building over 1,000 generative AI applications, Jassy said in a shareholder’s letter. He added that Amazon’s AI revenues are up “three-digit” compared to the previous year, representing “annual revenue mileage of billions of dollars.”
Amazon further declined to comment.
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