Jeff Bezos founded Amazon as a retail company. But to hear CEO Andy Jassy talk, Amazon's future lies in artificial intelligence.
"Every single one of our businesses inside of Amazon, every single one, has multiple generative A.I. initiatives going on right now," Jassy said during the company’s quarterly earnings call on Thursday.
That includes Amazon's retail stores, its online advertising business, its streaming entertainment business, its cloud business, and its consumer electronics business. “You can just imagine what we’re working on with respect to Alexa,” Jassy teased, referring to the virtual assistant that powers Amazon's Echo devices. Generative A.I. is “going to be at the heart of what we do.”
A.I. is dominating the conversation this earnings season. Executives at Alphabet, Meta and Microsoft all mentioned the buzzword dozens of times during their respective calls with investors, Fortune previously reported. While these companies have been developing A.I. technologies for years, OpenAI’s launch of ChatGPT in November 2022 triggered a race to release competitive chatbots and prove to investors they are leaders in the A.I. space.
Amazon's broad menu of businesses, which ranges from the Whole Foods supermarket chain to digital advertising, means that the company has plenty of places to insert A.I. technology that could save costs or provide new customer experiences.
Amazon's stock was up roughly 9% after hours on Thursday following the release of quarterly financial results that topped analyst expectations. Amazon's net sales increased 11% year-over-year to $134 billion, driven by 22% revenue growth in its advertising business, 14% growth in subscription services, and 12% growth in its AWS cloud business,.
Amazon's cloud business launched A.I. services Bedrock and Titan in April. It intends to build a business providing large language models to companies who don’t want to spend the time and money building their own. Bedrock allows third parties to take Amazon’s model, Titan, and customize it for their own needs. Amazon also provides the chips necessary to train and run the A.I. models. For companies that build their own chatbots, Jassy said he hopes they will create it using AWS, which brings Amazon more business.
In its 15-page letter to investors breaking down the numbers, Amazon mentioned A.I. 16 times, which is more than it brought up Prime Video. In the letter from the same quarter last year, A.I. only came up twice.
Despite Amazon’s increased investment in A.I., Jassy tried to temper expectations. “We are a few steps into a marathon,” he said. While he is seeing “quite a bit of demand” for its products, the company will have to spend more on data centers and hardware before it translates into a major financial payoff from A.I., he said.
