What about Amazon?
That question comes up frequently these days in tech industry conversations about generative artificial intelligence, especially as Open AI leverages its partnership with Microsoft Azure, the Amazon Web Services cloud rival, to train the GPT-4 large language model (LLM) that powers applications including ChatGPT.
Amazon CEO Andy Jassy spends a chunk of his annual letter to shareholders, released Thursday morning, planting the company’s flag in the world of generative AI, and making the case that Amazon actually has a longstanding beachhead in this realm through its investments in machine learning.
“We have been working on our own LLMs for a while now,” Jassy writes toward the end of the letter. Amazon believes these emerging forms of artificial intelligence will “transform and improve virtually every customer experience,” and the company “will continue to invest substantially in these models across all of our consumer, seller, brand, and creator experiences,” he adds.
Longstanding work by AWS in machine learning, including specialized chips, will help AWS customers affordably train and build their own LLMs, Jassy writes.
He also cites Amazon’s CodeWhisperer (a rival to Microsoft-owned GitHub’s AI-powered CoPilot virtual pair programmer) as another example of the company’s generative AI work.
“I could write an entire letter on LLMs and Generative AI as I think they will be that transformative, but I’ll leave that for a future letter,” he concludes. “Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon.”
[Update: AWS this morning announced new tools for building large language models and generative AI.]
Amazon will evaluate costs and ‘proceed adaptively’: Toward the beginning of the letter, Jassy addresses the company’s recent cutbacks, including its decision to lay off 27,000 corporate workers.
He writes that Amazon “took a deep look across the company, business by business, invention by invention, and asked ourselves whether we had conviction about each initiative’s long-term potential to drive enough revenue, operating income, free cash flow, and return on invested capital.”
But perhaps the most notable sentence in this section hints that Amazon might not be done cutting costs. Jassy writes that he and Amazon’s leaders “will continue to evaluate what we’re seeing in our business and proceed adaptively.”
Big bets and long-term focus: This is Jassy’s second letter to shareholders since becoming CEO. His predecessor, Amazon founder Jeff Bezos, set the tone in 1997 with a letter that defined Amazon’s approach — putting investors on notice about its focus on long-term impact over short-term profits.
Jassy’s new letter addresses the challenges Amazon is facing in the larger economy, comparing this period to the dot-com bust, when Amazon had to borrow money to bolster its holiday inventory; and the Great Recession, when it decided to continue investing in its then-nascent cloud business.
He points to the subsequent success of AWS, now generating revenue at a rate of $85 billion per year, to establish credibility for some of the business bets that might seem similarly outlandish today.
Toward the end of the letter, he cites two examples: Amazon’s Project Kuiper satellite broadband initiative and Amazon Healthcare, including its OneMedical primary care acquisition.
Checking the name-checks: For those keeping score, other businesses receiving extensive ink in this year’s letter include Amazon grocery, fulfillment and logistics, advertising, international stores, Amazon Business, Buy with Prime, and of course AWS, which Jassy previously led and describes as still in its early days given the large volume of global IT spending that has yet to shift to the cloud.
The word “devices” is used one time in the letter, referencing the company’s decision to move on from “some newer devices where we didn’t see a path to meaningful returns.” That compares with 10 “devices” mentions in last year’s annual letter.
Return to the office: In case there was any lingering doubt, Jassy makes it clear that the company isn’t backing down from its push to get employees back in the office for at least three days a week starting in May. The Amazon CEO dedicates a section of the letter to this topic, amounting to his own return-to-work manifesto.
This is a portion:
We’ve become convinced that collaborating and inventing is easier and more effective when we’re working together and learning from one another in person. The energy and riffing on one another’s ideas happen more freely, and many of the best Amazon inventions have had their breakthrough moments from people staying behind after a meeting and working through ideas on a whiteboard, or continuing the conversation on the walk back from a meeting, or just popping by a teammate’s office later that day with another thought. Invention is often messy. It wanders and meanders and marinates. Serendipitous interactions help it, and there are more of those in-person than virtually. It’s also significantly easier to learn, model, practice, and strengthen our culture when we’re in the office together most of the time and surrounded by our colleagues.
Jassy concludes this section by writing, “Innovation and our unique culture have been incredibly important in our first 29 years as a company, and I expect it will be comparably so in the next 29.”
Read the full letter here.
