Inside CEO Andy Jassy’s Letter to Shareholders
As AWS (Amazon Web Services) announces an AI revenue run rate of more than US$15bn in the first quarter of 2026, in a 2025 letter to shareholders, CEO Andy Jassy outlines his plans for scaling AI for customer service, growing the power capacity of AWS and partnering with companies like NVIDIA to enhance digital performance.
In the letter, Andy discusses his origins in retail, his early ventures with Amazon, his thoughts on AI “truths” that will impact the company and his reflection on its successful performance for 2025.
Andy highlights the company’s revenue growth for 2025, with a YoY increase of 12%, going from US$638bn to US$717bn.
He added that Amazon’s free cash flow (FCF) decreased from US$38bn to US$11bn, driven by a YoY increase of US$50.7bn in purchases of property and equipment, net proceeds from sales and incentives.
The change in FCF reflects Amazon’s extensive capex investments into AI technologies.
“It’s hard to overstate my optimism for what’s ahead,” Andy said.
“Progress will not be linear. There will be moments of acceleration and moments where we adjust course.
“We will experiment, invest disproportionately behind what matters, and pull back when something isn’t working.
A seminal shift in technology
Andy discussed the emergence of AI as an instrumental component to strategic growth, calling the technology a “seminal shift” and said identifying disproportionate inflections like AI, robotics, space industrialisation and geopolitical conflict, demands a keen eye.
“Choosing which inflections are truly seminal versus “just interesting” requires judgment. Reasonable people can disagree,” Andy said.
“If you believe you’ve found one of these disproportionate shifts, you want to invest as aggressively as you responsibly can.”
Discussing the reinvention of customer service by AI and whether or not the technology is profitable, he lists six unavoidable “truths” related to the technology.
They are:
- AI is the world’s fastest adopted technology
- Customers are primarily choosing AWS for AI scaling
- AWS could grow faster with more power capacity
- Amazon’s NVIDIA-backed chip business is booming
- As AWS grows, Amazon could spend more on short term capex
- Customer commitments allow for accurate capex predictions
Andy stated the annual revenue run rate for Amazon’s chip business is now more than US$20bn, doubling from the US$10bn milestone the company reported at the start of 2026.
“There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future,” he added.
The company said in February 2026 that it plans to spend around US$200bn in capital expenditures this year, primarily focused on AI development and infrastructure.
The size of the investment drew concern from investors already worried about the potential of an AI bubble, but Andy stated that much of the spending going towards AWS will be monetised over 2027 and 2028, with customer commitments for a substantial portion of it.
“It’s not hard to imagine with the emergence of AI, that the interface with which customers want to interact with a retailer could be substantially different over time.
“The temptation is to just add a little AI to the existing experience. That’s a start. But, the trick for leaders, ourselves included, is how to get organised and convicted about going back to the starting line and reimagining your experiences from a clean sheet of paper, assuming you were building with the new technology available.”
Andy explained reinvention with AI is easier said than done, but that it remains a company-wide priority for enhancing the consumer experience.
“It may take us a while to find experiences better than what we have now, and it may take consumers time to adopt these new experiences, [but] everything gets reinvented.
He added that if companies want to achieve something innovative, they “need to be willing to go back to first principles.”
