April 11, 2025 – Amazon CEO Andy Jassy has urged businesses to make substantial investments in artificial intelligence (AI) to secure significant financial gains in the future, as per a report by TechCrunch.
In his annual letter to shareholders released on Thursday, Jassy emphasized the necessity for companies to allocate “substantial capital” to keep pace with AI advancements and meet escalating customer demand for AI-driven products. He highlighted Amazon’s own commitment to investing now for future returns.
This statement follows Amazon’s February announcement of plans to allocate over $100 billion in capital expenditures by 2025, with the “majority” of these funds earmarked for bolstering AWS’s AI capabilities, according to Jassy.
“We continue to believe that AI is undergoing an unprecedented transformation,” Jassy wrote in the letter. “The demand we’re witnessing is unprecedented, and our customers, shareholders, and company stand to benefit greatly from proactive investments today.”
Jassy noted that the primary expenses associated with AI currently revolve around data centers and chips, though these infrastructure costs are expected to decline over time.
“At AWS, the greater the demand, the more we need to procure data centers, chips, and hardware (and AI chips are significantly more expensive than traditional CPUs),” he explained. “We’re making these capital expenditures now, even though these assets will serve us for years to come.”
Jassy cited Amazon’s Trainium2 chip, unveiled last year, as an example of how AI infrastructure costs are likely to decrease over time. He added that these chips offer a 30%-40% higher cost-performance ratio compared to GPU-based compute instances currently in use.
Looking ahead, Jassy predicted a shift in AI pricing dynamics as training costs decrease, with more funds being directed towards inference, or the actual serving of AI models.
“We’re eager to reduce inference costs and help customers save money,” he wrote. “More cost-effective chips will play a role, but we also anticipate significant improvements in inference efficiency over the next few years through advancements in model distillation, prompt caching, compute infrastructure, and model architecture.”
In the letter, Jassy also disclosed that Amazon is currently developing over 1,000 generative AI applications. He noted that Amazon’s AI revenue is growing at a “double-digit” annual rate and has already reached a “billion-dollar annual revenue scale.”
