SAN FRANCISCO — Amazon CEO Andy Jassy expressed confidence in the future of the company's AI breakthroughs, particularly in the field of generative AI, in his recent shareholder letter. Despite Amazon being viewed as falling behind in AI, Jassy believes that their cloud computing business, Amazon Web Services (AWS), will play a significant role in developing world-changing AI. Rather than directly competing with consumer-facing applications like OpenAI's ChatGPT, Amazon's strategy revolves around building foundational AI models and selling them to enterprise customers, including Delta Air Lines, Siemens, and Pfizer. While many companies have invested billions in AI, including Amazon with a recent $2. 75 billion investment in start-up Anthropic, the integration of AI into existing products and the monetization of AI tools remain challenges. Amazon has dedicated substantial resources to generative AI, investing in both start-ups and infrastructure development. The company has also added prominent AI expert Andrew Ng to its board.

However, Amazon has faced obstacles in creating consumer-facing AI products that resonate with customers, and its efforts, such as the shopping assistant Rufus, have been underwhelming. The development of a more advanced and conversational Alexa assistant has also been delayed. Although Amazon's stock price has risen this year, the company is still recovering from pandemic-related overspending. To streamline operations and increase efficiency, Amazon plans to continue cutting costs, particularly in its fulfillment and logistics division. Jassy mentioned the ongoing evaluation of their fulfillment network to identify areas where costs can be reduced while improving delivery speed for customers.