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Amazon (AMZN+1.90%) CEO Andy Jassy said the company needs to operate like the “world’s largest startup” on Thursday in his annual letter to shareholders — which means continuing to invest in AI, cutting bureaucracy, and expanding into different realms.
The company has earmarked up to $100 billion on capital expenditures, a significant increase from last year’s $83 billion. Jassy told shareholders the investment is more than necessary — “Our customers, shareholders, and business will be well-served by our investing aggressively now,” he said.
Amazon plans to spend the majority of that investment on AI-related projects — data centers to expand its Amazon Web Services infrastructure, AI-infused updates to its voice assistant, Alexa, and more. In his letter, Jassy introduced Alexa+, an upgraded version of the voice assistant that incorporates advanced AI capabilities to add intuitive responses and personalized user experiences.
“If your customer experiences aren’t planning to leverage these intelligent models, their ability to query giant corpuses of data and quickly find your needle in the haystack, their ability to keep getting smarter with more feedback and data, and their future agentic capabilities, you will not be competitive,” Jassy wrote. “(AI is) moving faster than almost anything technology has ever seen.”
The CEO predicted that price-perfomant chips should help drive down the “cost per unit in AI,” as will “improvements in model distillation, prompt caching, computing infrastructure, and model architectures.” Jassy said Amazon’s Trainium2 chips currently offer 30-40% better price performance than the GPU-powered versions currently available.
“AI does not have to be as expensive as it is today, and it won’t be in the future,” Jassy wrote.
He also said the company needs to prioritize “scrappiness” and “curiosity” and must be willing to take risks, which, at Amazon, has seemed to include overhauling corporate culture, cutting down on red tape, and convincing workers to do more (and faster) with less.
Jassy has overseen a thinning of the company’s workforce — laying off more than 27,000 employees in 2022 and 2023 with smaller job cuts last year — mandated a return-to-office policy, increased the employee-to-manager ratio, and created a “No Bureaucracy” email where employees could report unnecessary processes (Jassy said this led to over 375 policy changes aimed at enhancing operational efficiency).
“Builders hate bureaucracy,” Jassy said. “It slows them down, frustrates them, and keeps them from doing what they came here to do. As leaders, we don’t always see the red tape buried deep in our organizations, but we can sure as heck eliminate it when we do.”
In his letter, Jassy said Project Kuiper, the company’s low-Earth orbit satellite, “aims to solve” the digital divide in broadband connectivity. Amazon is launching its first production satellites and aims to have over 3,200 in orbit over the next few years. The CEO also pointed to some of Amazon’s progress in its health care realm — Amazon Pharmacy and Amazon One Medical — which he said will help answer the question: Why does healthcare have to be so stressful?
“I’m excited about the future inventions to come,” he said. “We’re not going to be bored any time soon.”