A Perspective on CEO Andy Jassy’s (Amazon) 2024 Letter To Shareholders

Amazon (including AWS) is investing heavily (billions - hundreds) in generative AI. This is no secret given its public plans for chips, models, infrastructure, AWS, Anthropic, funds to support smaller companies, and more. What interests me is the early conversation on how their investments will ultimately impact consumer experiences and products. 

Here are a few excerpts from his letter:

• “A great personal assistant can answer virtually any question and get things done on your behalf. There have been no digital solutions that can do both yet. That is, until Alexa+ arrived.”

• “Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we’ve only fantasized. … if your customer experiences aren’t planning to leverage these intelligent models … [shortened] …, you will not be competitive.”

• “Fundamentally, if your mission is to make customers’ lives better and easier every day, and you believe every customer experience will be reinvented by AI, you’re going to invest deeply and broadly in AI. That’s why there are more than 1,000 GenAI applications being built across Amazon, aiming to meaningfully change customer experiences in shopping, coding, personal assistants, streaming video and music, advertising, healthcare, reading, and home devices, to name a few.” 

Mobile is the last (and current) transformational technology that enhanced, displaced, and disrupted consumer experiences directly. I will share a few perspectives from someone who has studied consumer adoption and use of mobile experiences and products over the past 25 years. I believe his statements are:  

• Conservative when he references the impact. While I haven’t spoken with him or a representative of Amazon, I believe they need to be so because we haven’t really imagined how genAI (or AI agents) will impact consumer experiences. As my former colleague J. McQuivey once said, “we’re still doing old things in new ways rather than doing new things (with new technology).” 
  

• Intentionally vague when it comes to personal assistants. The arms race to collect consumers’ data and monopolize their digital time with a goal of getting to know them and ultimately be their personal (digital) assistant is a decade old. Alphabet (Google), Amazon, Apple, and Meta are deep in it. While each of these players has some depth and breadth in consumer data, not one has the holistic picture. Bigger obstacle? Doing useful things with the data. To date, no digital assistant has strung together services in ways that truly deliver convenience to consumers beyond voice to retrieve answers or turn on music at home. These brands have been offering consumers convenience through shortcuts for years - my POV - limited adoption given limited utility so far. I’m excited about how the massive computer power of genAI changes that. 
  

• A wake up call for consumer brands - or should be. The idea of 1,000 GenAI applications is compelling especially if you have no strategy for how to incorporate GenAI into your consumer experiences beyond personalized outbound marketing or chatbots in your contact center. And sure a GenAI app could be a feature, a personalized experience, a new product. Hard to measure what 1,000 is. 

The letter is here (online) and a 26 minute read. I copied and pasted the three paragraphs referenced in my blog. The complete quotes are below in case you would like more context. 

Why have personal assistants not yet taken off? How can Alexa help?

A great personal assistant can answer virtually any question and get things done on your behalf. There have been no digital solutions that can do both yet. That is, until Alexa+ arrived. Alexa+ is not only comparably intelligent to the leading chatbots, but can take a plethora of real actions for you. She can play music, play video, move media from one of your devices to another, set alarms and timers, control your smart home, order across hundreds of millions of ecommerce items, make reservations for restaurants or Ubers, order concert tickets, alert you when your favorite artist announces a tour, find a plumber to fix your sink, and memorize whatever you’ve done on Amazon. This is pretty game-changing for consumers, and just the start of what Alexa+ will do. We have over 600 million Alexa devices out there today, and expect Alexa+ to play an even more vital role in the lives of these hundreds of millions of customers in the future.

Why is AI so important? Will it really have as much impact as some claim and when?

Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we’ve only fantasized. The early AI workloads being deployed focus on productivity and cost avoidance (e.g. customer service, business process orchestration, workflow, translation, etc.). This is saving companies a lot of money. Increasingly, you’ll see AI change the norms in coding, search, shopping, personal assistants, primary care, cancer and drug research, biology, robotics, space, financial services, neighborhood networks—everything. Some of these areas are already seeing rapid progress; others are still in their infancy. But, 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. How soon? It won’t all happen in a year or two, but, it won’t take ten either. It’s moving faster than almost anything technology has ever seen.

OK, I buy AI is big; but why invest this much this quickly?

Fundamentally, if your mission is to make customers’ lives better and easier every day, and you believe every customer experience will be reinvented by AI, you’re going to invest deeply and broadly in AI. That’s why there are more than 1,000 GenAI applications being built across Amazon, aiming to meaningfully change customer experiences in shopping, coding, personal assistants, streaming video and music, advertising, healthcare, reading, and home devices, to name a few. It’s also why AWS is quickly developing the key primitives (or building blocks) for AI development, such as custom silicon AI chips in Amazon Trainium to provide better price-performance on training and inference, highly flexible model-building and inference services in Amazon SageMaker and Amazon Bedrock, our own frontier models in Amazon Nova to provide lower cost and latency for customers’ applications, and agent creation and management capabilities.