Amazon CEO Andy Jassy signaled confidence that the company will get costs under control in his annual shareholder letter, where he also noted the tech giant was “spending heavily” on AI tools that have gained popularity in recent months.
In the letter, Jassy described 2022 as “one of the harder macroeconomic years in recent memory” and detailed the steps Amazon had taken to trim costs, such as shuttering its health care initiative Amazon Care and some stores across the country. The company had also slashed 27,000 corporate roles since the fall, marking the biggest rounds of layoffs in its history.
“There are a number of other changes that we’ve made over the last several months to streamline our overall costs, and like most leadership teams, we’ll continue to evaluate what we’re seeing in our business and proceed adaptively,” Jassy wrote.
The company’s profitable cloud computing unit Amazon Web Services also faces “short-term headwinds right now,” despite growing 29% year-over-year in 2022 on a $62 billion revenue base, Jassy wrote. He noted challenges for the unit stem from companies spending more cautiously in the face of challenging current macroeconomic conditions.
Despite the cuts and “turbulent” times, Jassy said he strongly believes Amazon's “best days are in front of us.”
The Seattle company will continue to invest in specialized chips most used for machine learning, its advertising business as well as generative AI tools. The tools are part of a new generation of machine-learning systems that can converse, generate readable text on demand and produce novel images and video based on what they’ve learned from a vast database of digital books and online text.
“Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon,” Jassy wrote, using the abbreviated version of Large Language Models, or AI that can mimic human intelligence.
On Thursday, Amazon also announced several new services that will allow developers to build their own AI tools on its cloud infrastructure.
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