Amazon Chief Executive Officer (CEO) Andy Jassy released his annual letter to Amazon (AMZN) shareholders Thursday, covering a range of topics across its business from the emergence of 澳洲幸运5官方开奖结果体彩网:artificial intelligence (AI) to the benefits of regionali🐎zing its warehouse netwo༺rk.

Jassy thinks "Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet," echoing 澳洲幸运5官方开奖结果体彩网:JPMorgan Chase CEO Jamie Dimon's shareholder letter from earlier this week, and highlighted the benefits of Amazon's shift to a more regionalized warehouse network that has allowed for more same-day and overnight deliveries.

Jassy also wrote that the company has seen significa💙nt benefits from its cost-cutting efforts, with plans to c🌺ontinue to identify areas of the business where Amazon could trim costs going forward.

The company hasn't announced a date to report first-quarter earnings yet, but has usually done so in late April, and plans to hold its annual shareholder event May 22. Amazon shares were little changed soon after the opening bell Thursday, but had risen 24% so far in 2024 and 86% over the last year to Wednesday's closing price of $185.95.

Excited About ꦏPotential Value AI 🌞Could Add to Business

Jassy spent a portion of the letter expressing his excitement around AI in general and specifically 澳洲幸运5官方开奖结果体彩网:generative AI, which has caused a 澳洲幸运5官方开奖结果体彩网:boom in stock prices of a numbe𝄹r of tech co𝔍mpanies over the last year.

He wrote that AI could be the most important set of "primitives" the company is creating that could enable "breakthrough customer experiences," referring to Amazon's way of thinking about business and software development in terms of "building blocks" that can be combined in a variety of ways to make different products and serve different customers.

AI's potential impact is separated into three layers, according to Jassy, with the bottom layer the foundation models that power AI products, which Amazon is investing in through the creation of new types of chips to operate and train AI models. Anthropic and Airbnb were companies cited by Jassy as companies that are already using Amazon chips to power their AI products.

The middle layer is customers using Amazon's foundation models and cloud services with their own data to make a generative AI application that fits their needs. The company is investing in this through Amazon Bedrock, which Jassy said already has "tens of thousands" of customers a few months after launching, including Delta Air Lines (DAL), Intuit (INTU), and Pfizer (PFE).

The top layer Jassy identified is the application layer, the AI products that consumers interact with, including Amazon's Alexa, which powers its Echo devices; Rufus, its new shopping assistant; and Amazon Q, its coding assistant.

Cost-Cutting Is Working, and Will Continue

Amazon's efforts to cut costs in 2023 paid off, as Jassy noted that the company had an 澳洲幸运5官方开奖结果体彩网:operating margin of 6.4% in 2023, compared to 2.4% the year prior. For the first time since 2018, Jassy wrote, Amazon's "cost to serve" declined thanks to decreased travel distance of most items as the company regionalized its product storage methods.

澳洲幸运5官方开奖结果体彩网:Inbound fulfillment architecture and inv🦹entory placement were areas Jassy identified as areas Amazon could continue to cut costs around in 2024.

Regionalization Strat𒈔egy Boosting Same-Day, Overnight Deliveries

Travel costs were also significantly decreased as the company shifted to a regional model, stocking tho൩usands of the most-ordered products in specific warehouses around a number of regions in tꦯhe U.S., making it easier to ship same-day or overnight orders. Jassy said that more than 7 billion products were delivered the same or next day in 2023, over 4 billion of which were in the U.S.

Amazon plans to at least double the number of same-day warehouses from the 58 it already has, with Jassy noting that many products at those warehouses can be picked, packed, and shipped in as little as𝐆 11 minutes.

The same-day facilities could also be a boon to Amazon's grocery and pharmacy businesses, with goals of eventually making perishable and non-perishable foods and many commonly ordered medications available for delivery in under an hour. Jassy said the growth of its drone delivery business could also help accomplish that rapid-delivery goal.

Growth Areas Identified in Each of Amazon's Core Businesses

Throughout the letter, Jassy noted areas that all of Amazon's key businesses could improve. The online marketplace could benefit as he thinks the world of physical retail will continue to shrink and people will shop online for a wider variety of products, especially if Amazon can continue to offer sales and lower prices like on 澳洲幸运5官方开奖结果体彩网:Prime Big Deal Days and 澳洲幸运5官方开奖结果体彩网:Black Friday.

澳洲幸运5官方开奖结果体彩网:Amazon Web Services (AWS) could continue to grow as more businesses shift their data to being stored on the cloud, as well as through its connections to the world of generative AI. Jassy also has "increasing conviction that Prime Video can be a large and profitable business on its own," as Amazon enters its third season broadcasting "Thursday Night Football" this year, and the 澳洲幸运5官方开奖结果体彩网:introduction of ads to the service in recent months coul🐈d be another long-term revenue stream.