Amazon focuses on artificial intelligence (AI)

On the occasion of the usual annual letter to shareholders, Andy Jassy, the current chief executive officer of Amazon, outlined a clear strategic direction for the Seattle multinational: invest decisively in artificial intelligence (AI). 

This is in order to remain competitive in a rapidly evolving sector.  His words leave no room for doubt. The adoption of AI is not an option, but a necessity for those who want to make their customers’ lives “simpler and better every day”.

Billion-dollar investments: an imperative, not a risk for Amazon in the field of AI

According to Jassy, to emerge in the new technological era it is essential to commit on a large scale. 

In particular, significant resources are needed to obtain dedicated chips for artificial intelligence and to build new data centers capable of supporting the expansion of digital services.

“Our clients, shareholders, and the entire business will benefit from this aggressive investment from now on,”

stated in his communication, emphasizing how this effort is essential to face the competition and meet the expectations of a constantly changing market.

Amazon, just like other giants in the tech sector, is betting heavily on generative AI, with applications ranging from chatbots for sellers to assistance for businesses and end consumers.

One of the most concrete examples of this commitment is found in the latest update of Alexa, Amazon’s voice assistant, recently revisited with an AI approach after long delays and an investment of billions of dollars.

The new edition, named Alexa+, integrates generative artificial intelligence developed by Anthropic, a startup in which Amazon has already invested about 8 billion dollars.

The flagship software of Anthropic, Claude, is now an integral part of Alexa+ and will soon be distributed to selected users.

The goal is to make Alexa more “human,” capable of sustaining natural dialogues and providing personalized assistance, once again revolutionizing the user experience.

The race for data centers: a common trend among tech giants

Jassy’s remarks on the need to expand Amazon’s AI infrastructure echo the recent statements of Sundar Pichai, CEO of Alphabet (Google’s parent company). 

Pichai has revealed plans to invest approximately 75 billion dollars over the course of the year, focusing specifically on expanding their capacity in data centers. 

For both, Jassy and Pichai, artificial intelligence is the opportunity of the century — too big to let only others dominate it.

Even though it is formally addressed to shareholders, the lettera di Jassy is one of the most anticipated documents not only by investors, but also by Amazon employees, market analysts, and even competitors. 

From a now consolidated tradition, Amazon accompanies each new letter with the first one written in 1997 by Jeff Bezos, founder and executive chairman, demonstrating the continuity of strategic commitment over time.

In a moment when economic instability, such as the threat of new customs tariffs on imports (especially from China), shakes global markets, Jassy has chosen not to address the topic. 

A decision that likely signals more focused priorities on innovation and less on the ongoing commercial war.

From a financial perspective, Amazon shares have lost 13% of their value since the beginning of the year, a loss that is smaller compared to that recorded by competitors like Alphabet and Apple, but higher than the -7% reached by Microsoft in the same period.

As for Jassy’s compensation, 2023 brought good news for the CEO, with a total salary of 40.1 million dollars, up from 29.2 million the previous year. 

The credit, in large part, goes to the bull of about 40% in the price of Amazon shares during the year.

A Turning Point on DEI: Significant Silences

In the meantime, the company announced that it has received eight proposals from the shareholders, ranging from achieving sustainable goals to data management in the field of artificial intelligence, up to transparency on working conditions in the warehouses. 

However, Amazon has recommended voting against all proposals, expressing the desire to maintain control over its internal policies.

Noteworthy is also a clear change of course in corporate documents regarding diversity, equity, and inclusion (DEI). 

Unlike the previous year, the new proxy statement has eliminated any explicit reference to these three areas, which were previously mentioned 21 times.

References to DEI as distinctive competencies of two board members, Jamie S. Gorelick and Jonathan J. Rubinstein, have also been removed. 

In place of the old section dedicated to DEI initiatives, there is now a new wording that generically speaks of “inclusive experiences,” indicating a change in the language — and perhaps in the political approach — of the company.

Overall, Andy Jassy’s letter definitely looks to the future of Amazon, where AI, technology, and customization of the customer experience become the new frontiers to conquer. 

With billion-dollar investments in infrastructure and strategic collaborations like the one with Anthropic, the company is laying the foundations to remain central in the global landscape of innovation.

Never forgetting — even if not stating it explicitly — that in the race for AI, the real risk is not spending too much. But rather, being left behind.