- Jassy emphasized aggressive investment in AI during a call with analysts.
- Amazon plans $75 billion in capex, and even more in 2025, mostly for cloud services.
- Amazon’s AI services are rapidly growing, with significant demand for AWS’s AI chips.
Just when you thought Big Tech executives couldn’t get more bullish on AI, Amazon CEO Andy Jassy upped the ante on Thursday.
During a call with analysts, he described a range of attractive opportunities for Amazon, and said the company will continue to “aggressively” invest in AI.
Amazon is on pace to spend $75 billion on capital expenditures this year, and it will spend even more in 2025, the CEO added. Most of this will be for the Amazon Web Services cloud unit.
“We’ve proven over time that we can drive enough operating income and free cash flow to make this a very successful return on invested capital business,” Jassy said. “And we expect the same thing will happen here with generative AI. It is a really unusually large, maybe once in a lifetime type of opportunity.”
Jassy’s remarks came after Amazon reported third-quarter results that largely beat Wall Street expectations. Amazon’s stock jumped roughly 6% in after-hours trading.
Amazon has launched a number of new AI services in recent years, including Bedrock, an AI development tool, the Rufus shopping agent, and homegrown AI chips called Inferentia and Trainium.
Those AI services are now on pace to generate “multi billion dollars” in revenue this year, and are growing at “triple digit percentages year over year,” Jassy said during the call. Amazon’s AI business is “growing three times faster at its stage of evolution than AWS did itself,” he added.
AWS’s in-house AI chip business has seen mixed results so far due to Nvidia’s huge market share, BI previously reported. On Thursday, Jassy said he sees a “chance to improve over time” in that space because AWS’s chips are more affordable than other offerings.
Customers are realizing that AI model training and inference “could get costly” and AWS’s AI chips can be “very compelling” in terms of its price, the CEO explained.
In fact, he said customer demand has been so strong that AWS had to go back to its chip manufacturing partners twice to produce more of its AI chips, Jassy added.
“It’s a very significant opportunity for us in the AWS space, and it’s going to be a very significant opportunity for customers,” Jassy said.
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