Amazon CEO Andy Jassy defends AI investment plan in annual letter to shareholders

Amazon.com Inc (NASDAQ:AMZN) CEO Andy Jassy successful his yearly missive to shareholders has elaborate a firm strategy centered connected high-scale superior concern and method self-reliance, adjacent arsenic these priorities importantly reduced the company’s short-term escaped currency flow.

While Amazon's full gross grew to $717 cardinal successful 2025, escaped currency travel fell from $38 cardinal to $11 cardinal owed to a $50.7 cardinal summation successful spending connected spot and equipment.

Jassy confirmed that superior expenditures are projected to scope astir $200 cardinal successful 2026, chiefly to enactment artificial quality infrastructure and the enlargement of the company’s logistics and outer networks.

He dismissed concerns of a imaginable AI bubble, writing: "I’ve followed the nationalist statement connected whether this exertion is over-hyped, whether we’re successful ‘a bubble,’ and if the margins and ROIC volition beryllium appealing. My beardown conviction, astatine slightest for Amazon, is that the answers are no, no, and yes."

A large absorption of the missive progressive Amazon’s efforts to internalize technologies presently dominated by outer providers specified arsenic NVIDIA, Intel, and SpaceX. Jassy’s appraisal of the competitory scenery included circumstantial critiques of existing marketplace standards, peculiarly the precocious outgo of outer chips.

"Virtually each AI frankincense acold has been done connected NVIDIA chips, but a caller displacement has started," helium wrote, and added that portion the institution remains a spouse to NVIDIA, "customers privation amended price-performance."

Jassy besides claimed that the semiconductor marketplace is repeating a signifier seen with CPUs, wherever Amazon’s proprietary Graviton chips displaced incumbents. "The aforesaid communicative arc is unfolding successful AI," helium wrote.

He estimated that by utilizing its ain Trainium chips astatine scale, the institution volition "save tens of billions of capex dollars per year, and supply respective 100 ground points of operating borderline vantage versus relying connected others’ chips for inference."

Jassy further directed disapproval astatine accepted logistics and telecom providers, stating that "rural customers are often de-prioritized by logistics and telecom providers due to the fact that distant communities are much costly to serve."

He described the company’s outer network, "Amazon Leo," arsenic a situation to these established industries, including SpaceX’s Starlink, by promising show helium claimed would beryllium "six to 8 times amended connected uplink, and 2 times amended connected downlink than what customers person entree to now."

Regarding the company's broader operational philosophy, Jassy referenced the set The Beths to explicate that "the consecutive enactment was a lie" successful business.