Amazon CEO Andy Jassy emphasized Amazon's AI investments during the third-quarter earnings call.
Amazon Web Services: The Cornerstone of Amazon's AI Strategy
During Amazon's recent third-quarter earnings call, CEO Andy Jassy highlighted Amazon Web Services (AWS) as the key to Amazon's AI success. Jassy defended the company's aggressive AI investments, which led to Amazon surpassing Wall Street's revenue and earnings per share expectations, resulting in a 6% stock rise in after-hours trading.
The Logistics Challenge of AWS
Jassy pointed out that AWS presents a significant logistics challenge due to its massive scale. He explained that Amazon's experience in building and managing a vast cloud-computing business has given them an edge in AI. With an expected $75 billion in capital expenditures this year, primarily directed towards AWS, Amazon is well-positioned to excel in AI.
The Growth of Amazon's AI Business
Jassy revealed that Amazon's AI business is expanding rapidly, outpacing AWS's growth at a similar stage. The AI segment is described as a "multibillion-dollar" business, experiencing triple-digit growth year over year.
The Importance of Cloud Storage for AI Success
Jassy emphasized the significance of storing data in the cloud for companies aiming to leverage generative AI effectively. He highlighted that businesses not utilizing cloud storage may face challenges in competitiveness. This trend benefits AWS as more companies transition to cloud storage solutions.
AI Investments Among Big Tech Companies
Amazon is not alone in its significant AI spending. Other tech giants like Meta and Alphabet are also ramping up their AI investments. Meta has projected substantial capital expenditure growth in 2025 to strengthen its AI infrastructure. Alphabet's CEO, Sundar Pichai, stressed the importance of investing in AI to avoid falling behind in the rapidly evolving tech landscape.
As the competition intensifies, Amazon's focus on AI and AWS positions the company as a formidable player in the AI wars.
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By: kvlamis@businessinsider.com (Kelsey Vlamis)
Title: Amazon CEO Andy Jassy’s Secret Weapon in the AI Wars
Sourced From: www.businessinsider.com/amazon-ceo-andy-jassy-secret-weapon-ai-aws-2024-10
Published Date: Fri, 01 Nov 2024 01:47:51 +0000
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