Amazon CEO Andy Jassy is calling on companies to invest "aggressively" in artificial intelligence (AI) to reap the full financial rewards in the future. In his annual letter to Amazon shareholders, Jassy stressed that substantial capital is required to keep up with the pace of AI innovation and customer demand for AI products.

Jassy's comments come on the heels of Amazon's announcement during its fourth-quarter earnings call in February to spend more than $100 billion on capital expenditures in 2025, with the "vast majority" of that sum dedicated to AWS AI capabilities. This significant investment underscores Amazon's commitment to staying at the forefront of AI innovation and meeting the growing demand for AI products.

According to Jassy, the biggest AI expenses currently are data centers and chips, but he believes that over time, this infrastructure will start to cost less. He cited Amazon's own Trainium2 chips as an example, which offer 30%-40% better price-performance than the current GPU-powered computing instances generally available today. Released in late 2024, Trainium2 is a testament to the potential for AI infrastructure costs to decrease in the future.

Jassy also highlighted the shifting dynamics of AI pricing, noting that as training costs for AI come down, money will be redirected toward inference, or actually serving AI models. To address this, Amazon is working to make inference less expensive for customers, with improvements in model distillation, prompt caching, computing infrastructure, and model architectures expected to drive efficiency gains in the next couple of years.

Amazon is already seeing significant returns on its AI investments, with Jassy revealing that the company is currently building over 1,000 generative AI applications. Moreover, Amazon's AI revenue is growing at "triple-digit" year-over-year percentages, representing a "multi-billion-dollar annual revenue run rate."

Jassy's emphasis on aggressive AI investment is not limited to Amazon's own ambitions. He believes that companies across the board need to prioritize AI investment to stay competitive and reap the financial rewards that AI has to offer. As he wrote in his shareholder letter, "We continue to believe AI is a once-in-a-lifetime reinvention of everything we know. The demand is unlike anything we've seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now."

The implications of Jassy's comments extend far beyond Amazon's own AI strategy. As AI continues to transform industries and revolutionize the way businesses operate, companies that fail to invest in AI risk being left behind. Jassy's call to action serves as a reminder that AI is not just a nicety, but a necessity for companies looking to stay ahead of the curve and drive long-term growth.

As the AI landscape continues to evolve, it will be interesting to see how companies respond to Jassy's urging. Will they heed the call to invest aggressively in AI, or will they risk falling behind in the AI revolution? One thing is certain – Amazon is betting big on AI, and its commitment to investing in this technology is likely to have far-reaching consequences for the industry as a whole.