Why Amazon's CEO thinks the company's generative AI could be the next big thing

Andy Jassy says he is optimistic that most of the world-changing artificial intelligence will be built on top of Amazon's cloud subsidiary AWS

Andy Jassy, chief executive of Amazon, speaks during a technology summit in San Francisco, California. Bloomberg
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Amazon, which has maintained a relatively low profile in the field of generative artificial intelligence compared to Microsoft and Google, announced on Thursday that it is expanding its capacity to boost the technology globally and contribute to its democratisation.

The world’s biggest e-commerce company said its cloud subsidiary Amazon Web Services will become an integral component of the future generative AI boom.

“We are optimistic that much of this world-changing AI will be built on top of AWS,” Andy Jassy, Amazon’s chief executive, said in his annual letter to shareholders on Thursday.

Amazon’s share price jumped 1.67 per cent to close at $189.05 on Thursday. The company’s market capitalisation stood at $1.96 trillion.

Generative AI technology was catapulted into the spotlight with ChatGPT, which was launched by Microsoft-backed OpenAI in December 2022.

It is a programme that comes up with humanlike responses to prompts in seconds, based on information publicly available on the internet. However, its use and accuracy have come under scrutiny.

In December, Alphabet-owned Google launched Gemini, which became the first AI model to beat human experts on MMLU (Massive Multitask Language Understanding), one of the most widely used methods to test the knowledge and problem-solving abilities of the technology.

Globally, AI investments are projected to hit $200 billion by 2025 and could possibly have a bigger impact on gross domestic product, Goldman Sachs Economic Research said in a report in August.

Mr Jassy, who become the chief executive in 2021 after the company’s founder Jeff Bezos stepped down, said future generative AI opportunities are numerous.

“Generative AI may be the largest technology transformation since the cloud, and perhaps since the internet … the amount of societal and business benefit from the solutions that will be possible will astound us all.”

In his letter to shareholders, Mr Jassy indirectly criticised rivals’ AI models, saying Amazon offers models from various companies, such as Anthropic, Stability AI, Meta, Cohere as well as its own models, instead of relying solely on one dominant AI model.

“Customers don’t want only one model. They want access to various models and model sizes for different types of applications,” he added.

Last year, Amazon’s total revenue grew 12 per cent yearly to $575 billion, while AWS revenue increased 13 per cent to $91 billion.

The company is expected to announce its last quarter earnings on April 25.

Updated: April 11, 2024, 9:47 PM