Amazon CEO defends AI spend: “We’re not going to be conservative”

Source Domain: www.cnbc.com

Amazon CEO Andy Jassy insists that the company’s significant investments in artificial intelligence (AI) are worthwhile, aiming to secure leadership and future growth.
Amazon plans to spend around $200 billion this year on capital expenditures, largely dedicated to enhancing its AI infrastructure, surpassing its tech peers and showing a near 60% increase from the previous year.
Despite the large investment, Amazon shares have dropped over 4% year-to-date due to investor skepticism about the ROI of the AI spending.
Jassy stressed the importance of these investments to capture a “once-in-a-lifetime opportunity” and meet high demand for Amazon’s AI compute solutions.
For the first time, Jassy disclosed that AI revenue in Amazon’s cloud computing segment has reached $15 billion annually.
The custom chip business, comprising products like Graviton processors and Trainium AI chips, is generating over $20 billion annually, with triple-digit percentage growth year-over-year.
Amazon expects to monetize a substantial portion of its $200 billion capital expenditure over the next two years.

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