Amazon CEO Andy Jassy (Image Press Agency/Shutterstock)

Amazon’s AI business is growing faster than AWS did

The company also talked about plans to “re-architect the brains of Alexa” and lauded warehouse robotics improvements.

11/1/24 1:05PM

Amazon’s third-quarter results offered some interesting glimpses at how AI is not only growing the company’s white-hot cloud-computing business, but also how the company is using the technology to advance its core businesses.

AI cloud-computing demand is huge

Amazon’s AWS has long been a dominant player in cloud computing, and they were well placed to reap the benefits of the generative-AI boom starting around 2023, when tools like OpenAI’s ChatGPT and image-generation apps like Midjourney came along. Amazon CEO Andy Jassy said the AI computing business is growing at a faster rate than AWS.

“Our AI business is a multibillion-dollar business; it’s growing triple-digit percentages year over year and is growing 3x faster at its stage of evolution than AWS did itself,” Jassy said in the Q3 earnings call.

When asked about AI-computing chip constraints, which have been plaguing the industry due to the incredible demand, Jassy said everyone in the business is dealing with the same problem. Jassy said, “I believe we have more demand that we could fulfill if we had even more capacity today.”

Jassy touted Amazon’s strong relationship with AI-chip leader Nvidia, saying, “We have a very deep partnership with Nvidia. We tend to be their lead partner on most of their new chips. We were the first to offer H200s in EC2 instances. And I expect us to have a partnership for a very long time that matters.”

Amazon is also getting into the custom-silicon business by building its own AI chips, such as “AWS Trainium,” which is tailored to generative-AI training.

The company has spent $51.9 billion on capital expenditures so far this year, the majority of which is fueled by demand for Amazon’s AI-computing infrastructure. Amazon CFO Brian T. Olsavsky said the company plans on spending a total of about $75 billion on capital expenditures in 2024.

New warehouse robotics are very speedy

Amazon recently opened its 12th-generation fulfillment-center design at a building in Shreveport, Louisiana.

“This is the first facility that incorporates our newest robotics inventions to simplify stowing, picking, packing, and shipping processes,” Jassy said. “Thus far, this new design reduces fulfillment-processing time by up to 25%, increases the number of items we can offer for same-day or next-day delivery, and is expected to drive a 25% improvement in our cost to serve during peak within this next-generation facility.”

Alexa, what happened to you?

When Amazon rolled out Alexa in 2014, it delivered some truly futuristic technology to millions of people for the first time.

“When we first were pursuing Alexa, we had this vision of it being the world’s best personal assistant and people thought that was kind of a crazy idea,” Olsavsky said.

But 10 years later, Alexa has been left in the dust by a horde of incredibly powerful conversational AI agents. But Amazon thinks its Alexa devices offer a beachhead from which it can catch up in the AI wars.

Noting that there are around 500 million Alexa devices out there today, Olsavsky said, “We have a really broad footprint where we believe if we re-architect the brains of Alexa with next-generation foundational models, which we’re in the process of doing, we have an opportunity to be the leader in that space.”

This week Bloomberg reported that this is turning out to be a taller task than the company expected, saying that company insiders have said the next-gen Alexa has been repeatedly postponed and has now slipped into 2025.

While most AI chatbots today are good at retrieving and summarizing information for users, few are acting as “agents” capable of taking actions on behalf of users. Olsavsky hinted that may be something the company has planned for the new iteration of Alexa.

“I think that the next generation of these assistants and the generative-AI applications will be better at not just answering questions and summarizing, indexing, and aggregating data, but also taking actions. And you can imagine us being pretty good at that with Alexa,” Olsavsky said.

Generative AI a “once-in-a-lifetime” opportunity

Overall, Amazon is going all in on AI from the front end — where consumers actually use AI-powered tools — to the back end, where the models are trained, built, and hosted in the cloud.

“It is a really unusually large, maybe once-in-a-lifetime type of opportunity. And I think our customers, the business, and our shareholders will feel good about this long-term that we’re aggressively pursuing it,” said Jassy.

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JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

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Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

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The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”

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GM has reportedly rehired more than 100 former Cruise employees, 18 months after shuttering the robotaxi unit

GM has rehired more than 100 employees it let go early last year when it shuttered Cruise, its former robotaxi business, according to reporting by The Information.

The hiring spree, which also includes employees from Nvidia and Uber, is geared toward ramping up GM’s plans for personal-use self-driving vehicles and not robotaxis. The former had been the focus of Cruise, prior to GM shuttering it in 2024.

Reporting last fall revealed that GM was attempting to rehire some former Cruise employees, but the scope of that effort wasn’t clear. More than 1,000 employees were laid off when the automaker scrapped Cruise, which it invested $10 billion into.

Google’s Waymo, Cruise’s former chief rival, is now worth $126 billion after a $16 billion funding round earlier this year. The company says it’s serving 500,000 paid robotaxi rides per week in the US.