In his annual letter to shareholder, Amazon CEO Andy Jassey detailed his enthusiasm about the future of artificial intelligence and the impact it can have on the company, writing “generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet.”
There are three layers to the potential effect of AI, he said. The beginning layer is the foundation models that power AI products, while the middle layer is customers using those foundation models and cloud services to create a generative AI application for their needs. The top layer is the application of AI products used by customers, such as Amazon’s Alexa or Rufus, its shopping assistant.
Jassey also covered Amazon’s effective cost-cutting measures in 2023. The company increased its operating margin from 2.4% in 2022 to 6.4% in 2023, and the “cost to serve” decreased for the first time since 2018 because of regionalized product storage methods that cut down on travel distance for most items.
More than 7 billion products were delivered the same day or overnight in 2023, with 4 billion of those occurring in the U.S. Amazon plans to at least double the number of same-day warehouses—currently 58—it has across the country.
