Amazon Says 1,000 GenAI Applications In Development, CEO Andy Jassy Sees 'Significant Productivity And Cost Savings'
Amazon.com Inc. (NASDAQ:AMZN) is aggressively expanding its artificial intelligence capabilities, with CEO Andy Jassy revealing during the company’s fourth-quarter earnings call that approximately 1,000 generative AI applications are either built or in development across its business units.
What Happened: The tech giant’s AI initiatives span multiple operational areas, from customer service improvements to inventory management. “We have a number of very significant productivity and cost savings efforts in our retail business using generative AI, and it’s just a fraction of what we have going,” Jassy stated during the earnings call.
These AI implementations are already showing measurable results. The company’s AI-enhanced customer service chatbot has improved satisfaction rates by 500 basis points, while AI-powered inventory management has led to 10% better forecasting and 20% improved regional predictions.
Why It Matters: The announcement comes as Amazon reported strong fourth-quarter results, with revenue reaching $187.8 billion, up 10% year-over-year, and operating income hitting a record $21.2 billion. The company’s AWS cloud division, which hosts many of these AI initiatives, grew 19% year-over-year to achieve a $115 billion annualized revenue run rate.
Looking ahead, Amazon is heavily investing in AI infrastructure, with Jassy indicating that the majority of the company’s projected $26.3 billion quarterly capital expenditure will be directed toward AI capabilities for AWS. This investment comes as the company faces some AI capacity constraints, which Jassy expects to ease in the second half of 2025.
Amazon has a consensus price target of $255.37 from 41 analysts, with a high of $306 and a low of $212. The latest ratings from Benchmark, Telsey Advisory, and JMP Securities, average $275, implying a 20% upside.
Price Action: Amazon's stock dropped 4.05% in after-hours trading, settling at $229.16. Earlier on Thursday, it had closed at $238.83, marking a 1.13% gain, according to data from Benzinga Pro.
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