Amazon results offer a taste of future strategy

By now you probably know that Amazon has exceeded Third-quarter sales expectations on Thursday (Oct. 31), driven by the strength of its AWS cloud computing division and its fall sales events.

But what you may not have seen or heard is that CEO Andy Jassy played a few cards from his 2025 strategy deck, and no, they're not all exclusively related to GenAI. Artificial intelligence (AI) played a big role in Amazon's earnings commentary, but it wasn't as dominant as this week's earnings events from Apple and Google And Meta.

“At a time when consumers are cautious about their spending, we continue to lower prices and ship even faster,” Jassy told listeners on the call, departing from AI-obsessed comments he had made previous current earnings events. “And we can see this resonating with customers as our unit growth continues to be strong and outpacing our revenue growth.”

This sales growth drove Amazon to do so another record in net saleswhich rose 11% to $158.9 billion in the third quarter, compared with $143.1 billion for the year third quarter 2023.

With the customer – both consumer and business – at the center, Jassy went into detail about three areas that will set the company apart in 2025 over and beyond: Placing AI monetization in the context of AWS and consumer-facing applications; an aggressive strategy for Amazon Pharmacy; and an updated range of Alexa devices.

Monetize AI

On the AI front Jassy, ​​like Alphabet CEO Sundar Pichai on Wednesday, positioned himself for monetizing the technology as part of existing products and applications And Services. Amazon's artificial intelligence business has become a growth driver for AWS, generating billions of dollars in revenue with triple-digit percent year-over-year growth, as reported in the conference call.

The company has expanded its AI offerings through its Bedrock service, recently adding new models from Anthropic, Meta and Mistral. At the same time, it reports that over the past 18 months, AWS has released nearly twice as many machine learning and generative AI features as other leading cloud providers combined.

“Our AI business is growing more than three times faster than AWS itself at this stage of its evolution, and we felt like AWS was growing quite quickly,” Jassy said during the earnings call.

The company has used AI in several products, including Rufus, its shopping assistant, which expanded to seven new international markets, and Amazon Q, a developer tool that Jassy said saved the company millions in a single migration project.

Jassy also made it clear how important it is Amazon Pharmacy. The company will expand its prescription fulfillment service to 20 additional cities next year, creating a counterpoint to its current in-store experience.

“Slightly more than 90% of prescriptions dispensed in the U.S. are sold in brick-and-mortar pharmacies, but require customers to make a trip to physical pharmacists, with much of the selection behind locked shelves, waiting in line for medications, and themselves Only informed about the prices at the point of sale,” he said.

“The largest mail-order pharmacies offer delivery within five to ten working days. We believe customers deserve better. Today we can deliver 95% of it for the first time Amazon Pharmacy customers in the US within two business days and 20% of US Prime members within 24 hours.”

And finally, in response to an analyst question, he addressed the controversy surrounding the development of a new generation of Alexa devices. This debut has supposedly been postponed several times, and although Jassy did not promise a delivery date, it was clear from his comments that the new Alexa devices are in the final stages of development and will go a step further in actual placement command with Amazon via voice interactions. Jassy didn't seem interested in new Alexa devices that simply communicate with users. He clearly believed that AI has the ability to do so handle commandDelivery And Payments.

“We believe that if we redesign Alexa’s brain next generation “With the fundamental models we are currently developing, we have the opportunity to be a leader in this area,” he said.

“And I think if you look at a lot of applications today that use generative AI, there are a lot of them that are successful in cost avoidance and productivity. And then you see more and more applications doing that impacting the customer experience and the ability to capture large amounts of data and summarize, aggregate and answer questions, but there are still not that many Really In addition, it is good to take action on behalf of customers.

“I think the next generation will be these assistants and generative AI applications better It's not just about answering questions and summarizing, indexing and aggregating data, but also about capturing it Actions. And you can imagine that we can do that pretty well with Alexa.”