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Amazon posts AI-fueled cloud, ecommerce growth, shares jump

Feb 02, 2024 - uk.fashionnetwork.com
Amazon.com surpassed Q4 revenue expectations due to the introduction of new generative AI features in its cloud and ecommerce sectors, leading to significant growth during the holiday period. This resulted in an 8% increase in Amazon shares after the market closed. AWS CEO, Andy Jassy, highlighted the importance of generative AI in their services, predicting it to generate tens of billions of dollars over the next few years. Despite facing competition from Microsoft, Amazon Web Services posted a revenue of $24.2 billion, in line with analysts' expectations.

To strengthen its cloud business, Amazon plans to invest up to $4 billion in chatbot-maker Anthropic, in response to Microsoft's promised $10 billion investment in OpenAI. Amazon's CFO, Brian Olsavsky, announced that capital expenses are expected to increase this year to support AWS growth, including further investments in generative AI. Despite the company's strong performance, Amazon began the year by cutting jobs in several divisions, having reduced more than 27,000 jobs last year after heavy pandemic hiring.

Key takeaways:

  • Amazon.com surpassed fourth-quarter revenue expectations due to new generative AI features in its cloud and ecommerce businesses, causing shares to rise by up to 8%.
  • Amazon Web Services (AWS) reported a revenue of $24.2 billion in the fourth quarter, and Amazon plans to invest in generative AI and large language models to support AWS's growth.
  • Despite the strong performance, Amazon began the year by cutting jobs in several divisions, with more than 27,000 jobs cut last year after heavy hiring during the pandemic.
  • Amazon's plan to acquire iRobot, the maker of the Roomba vacuum cleaner, for $1.4 billion was thwarted by European regulators.
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