Amazon CEO Andy Jassy was interviewed on Mad Money by CNBC host Jim Cramer in Seattle, Washington. December 6, 2023.
CNBC
Amazon Chief Executive Andy Jassy sought to reassure investors who may be worried about future returns from the company’s massive investment in generating artificial intelligence.
In a conference call with analysts after the company reported third-quarter earnings on Thursday, Jassy pointed to the success of Amazon’s cloud computing business, Amazon Web Services, which has become critical despite the high cost of building data centers. Profit engine.
“I think we’ve proven over time that we can bring in enough operating income and free cash flow to make this a very successful return on investment capital business,” Jassy said. “We expect generative labor The same thing happens with wisdom.”
Amazon spend Property and equipment expenses for the quarter were $22.6 billion, an increase of 81% from the previous year. Jassy said Amazon plans to spend $75 billion in capital expenditures in 2024, and this number is expected to be higher in 2025.
Jassy said the growth in spending was primarily driven by investments in generative artificial intelligence. The company is rushing to invest in data centers, network equipment and hardware to meet huge demand for the technology.
“This is truly a very large opportunity, perhaps a once-in-a-lifetime opportunity,” Jassy said. “I think our customers, the business and our shareholders will be pleased with the long-term goals that we are aggressively pursuing.”
Artificial intelligence spending is a key topic on this week’s technology earnings call. Yuan It raised capital spending guidance on Wednesday, with Chief Executive Mark Zuckerberg saying he was “very pleased” with the team’s execution. at the same time, MicrosoftInvestments in OpenAI weighed on its fiscal first-quarter earnings reported on Wednesday, and the company said capital spending will continue to rise. A day earlier, Alphabet Chief Financial Officer Anat Ashkenazi warned that the company expects capital spending to grow in 2025.
Amazon said its cloud unit has gained more business from companies that need infrastructure to deploy generative artificial intelligence models. The company has also launched a variety of artificial intelligence products in recent months for businesses, third-party sellers and advertisers on its marketplace. The company is expected to launch an enhanced version of its Alexa voice assistant incorporating generative artificial intelligence, which Jassy said will be available “in the near future.”
Amazon hasn’t disclosed its generative AI revenue, but Jassy said Thursday that it has become a “billion-dollar revenue” business within AWS and “continues to grow at triple-digit year-over-year percentages.”
He added: “As AWS itself evolves, it’s growing more than three times as fast at this stage of its evolution, and we feel like AWS is growing pretty fast.”
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