Tech giant emphasizes investment in foundational building blocks in annual shareholder letter.
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| Amazon Eyes AI and More with "Primitives" Approach. Jassy details strategy in shareholder letter, highlighting optimism for Prime Video and Project Kuiper. |
Arlington, Virginia, April 11, 2024:
Amazon CEO Andy Jassy outlined the company's unwavering commitment to developing foundational technologies, or "primitives," that underpin innovation across various sectors.
In his annual shareholder letter, Jassy emphasized this philosophy, stating, "Building in primitives meaningfully expands your degrees of freedom... You've got options. You're only constrained by the primitives you've built and your imagination."
He highlighted how this approach has fueled the success of Amazon Web Services (AWS), accelerated delivery times for retail customers, and led to the decision to store and ship products for third-party sellers.
Jassy delved deeper into Amazon's three-layered approach to artificial intelligence (AI), a sector attracting intense interest from tech companies globally. The approach caters to developers building foundational models from scratch (bottom layer), those seeking to customize existing models (middle layer), and those wanting to create generative AI applications (top layer).
Jassy underscored Amazon's belief that generative AI "may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet."
The letter echoed investor optimism surrounding Amazon's financial outlook for the year's beginning. Analysts at TD Cowen anticipate a near 13% year-on-year increase in Amazon's first-quarter revenue, largely driven by accelerating AWS revenue.
Jassy expressed particular enthusiasm for two growth areas: Prime Video and Project Kuiper, the company's broadband satellite initiative. He pointed to new content and the introduction of advertising on Prime Video as reasons for the company's "increasing conviction" in its profitability.
Amazon leader Jassy hinted at more changes to Amazon's vast warehouse network, with a focus on cost reduction and faster delivery speeds. "We've challenged every closely held belief in our fulfillment network, and re-evaluated every part of it," Jassy wrote, adding that Amazon found "several areas" where it can improve.