On Thursday, $Amazon (AMZN.US)$ CEO Andy Jassy emphasized the company's significant investment in AI in the annual letter to Shareholders. Jassy stated:

"If you are committed to making customers' lives better and more convenient every day, and you believe that every customer experience will be reshaped by AI, then you must invest extensively and deeply in AI."

Jassy pointed out in the letter that Amazon will continue to invest heavily in AI Chips, Datacenter, and AI infrastructure construction:

"AI is a historic opportunity that changes everything we know. The customer demand it brings is unprecedented, and our acceleration of investment now is for the long-term benefits of customers, Shareholders, and the business."

Notably, his remarks are highly consistent with those of Google's parent company Alphabet CEO Sundar Pichai at the Google Cloud Conference the day before. Pichai stated that Alphabet plans to invest about 75 billion dollars this year in building Datacenter infrastructure and noted:

The opportunities brought by AI are the greatest we can encounter.

Moreover, in the face of the current reality that the cost of AI development and deployment remains high, Jassy stated that with technological evolution, the unit cost of AI usage will significantly decrease in the future.

AI does not need to remain as expensive as it is now, and it indeed will not be this expensive in the future.

He expects that several major factors will drive down AI costs, including more cost-effective AI Chips, more efficient model compression and prompt caching technology, and optimized computing infrastructure and model architecture design.

Jassy also compared the development of AI to the revolutionary changes in computing and storage costs brought by Amazon Cloud Computing Service (AWS) back in the day.

Cloud Computing lowered costs, spurred more innovation, better customer experience, and more infrastructure investment. AI will also follow a similar path.

Jassy revealed that Amazon plans capital expenditures as high as 100 billion dollars this year, most of which will be used for AI-related projects, including Datacenter, network equipment, AI Hardware, and the construction of generative AI service capabilities.

Currently, Amazon has launched several AI products, including its self-developed large model Nova series, self-developed AI Chip Trainium, consumer-facing shopping chatbot, a service platform Bedrock for third-party models, and a newly upgraded version of Alexa as a generative AI assistant.

Amazon also invested about 8 billion USD in the well-known AI startup Anthropic and integrated its AI model Claude into the 'Alexa+' platform.

Since taking over as CEO in 2021, Jassy has continued to push for the streamlining and cost control of Amazon's Business. From 2022 to 2023, the company laid off more than 27,000 people. In 2024, small-scale layoffs continued, and several unprofitable projects were closed, including the 'try before you buy' clothing service and the offline rapid delivery stores pilot.

Jassy stated that Amazon must operate like the world's largest startup:

'To maintain a culture of quick response, efficiency, and risk-taking, while avoiding bureaucracy.'

He set a goal to increase the ratio of grassroots employees to managers by 15% by the end of Q1 2024, reducing redundant management levels.

At the same time, he opened an internal channel called 'Anti-Bureaucracy Mailbox' to collect employee feedback. Nearly 1,000 emails have been received to date, and the company has made over 375 organizational and process optimization adjustments based on this feedback:

'Creatives hate bureaucracy... once we find 'red tape,' we must cut it without hesitation.'

From large-scale AI investments, to 'de-bloating' the organizational structure, to careful adjustments in culture and governance, Jassy outlines the core strategic logic in one sentence:

The current investment is aimed at enabling a future Amazon to have the ability to create the next era.

Additionally, Jassy discussed the issue of Trump's tariffs in an interview with CNBC on Thursday. He pointed out that the company is still assessing the overall impact of President Trump's new tariff policy, but Amazon's massive third-party seller network may choose to pass the cost pressure onto consumers.

I can understand why this is the case. I mean, regardless of the country, no one has an extra 50% profit margin to squander, and I think merchants will try to pass on the costs.

To cope with potential impacts, Amazon is also taking several measures, including strategically stockpiling in advance, renegotiating procurement contract terms with some suppliers, and trying to maintain stable prices for online goods.

Jassy also revealed that the company has observed some consumers starting to stock up in preparation for potential future price increases, but it remains unclear whether this phenomenon will continue.

In certain categories, we have indeed seen people purchasing in advance, but it is difficult to determine whether this is just an anomaly in the data, as it is only a few days' worth of information, or how long this situation will last.

The following is the full text of Amazon's CEO annual open letter, translated by AI:

2024 is set to be a strong year for Amazon.

Our total revenue increased by 11% year-on-year, rising from 575 billion USD to 638 billion USD. By business segment, North America revenue grew by 10%, from 353 billion USD to 387 billion USD; international business revenue grew by 9%, from 131 billion USD to 143 billion USD; and AWS (Amazon Cloud Computing Service) revenue grew by 19%, from 91 billion USD to 108 billion USD. For reference, only ten years ago, AWS revenue was just 4.6 billion USD, while Amazon's total revenue in that year was 89 billion USD.

In 2024, Amazon's operating revenue increased by 86% year-on-year, rising from 36.9 billion USD (operating margin 6.4%) to 68.6 billion USD (operating margin 10.8%). The free cash flow adjusted for equipment financing leasing increased from 35.5 billion USD in 2023 to 36.2 billion USD.

In addition to financial performance, we have genuinely improved and simplified customers' lives. In our Retail Trade business, we significantly expanded our selection of Commodities, continuously lowered prices (the independent research institution Profitero has named Amazon the lowest-priced platform for online retail in the USA for the eighth consecutive year), and delivered to Prime members at a record pace for the second consecutive year.

AWS launched a variety of new infrastructure and AI services that make creating exceptional customer experiences easier, including our latest custom AI Chip Trainium2, Amazon Nova series cutting-edge foundational models, and our flagship generative AI ("GenAI") services—Amazon SageMaker and Amazon Bedrock—with significant expansions in both the number and capabilities of the models.

Prime Video continues to release exciting original series, including new seasons of "Fallout," "Jack Reacher," "The Boys," and "The Lord of the Rings: The Rings of Power," as well as movies like "The Binge," "You Get What You Give," and "Red One," and sports events like "Thursday Night Football" and the UEFA Champions League (NBA and NASCAR will launch in 2025).

Apple TV+ has also officially joined the Prime Video channel, greatly enriching our content selection. We launched a series of new Kindle devices, including color versions, larger Scribe options, and the fastest Paperwhite series ever (this series achieved the highest sales of Kindle in over a decade within a single quarter). Additionally, we are continuously expanding our product selection in Amazon Pharmacy services, improving price transparency, and expanding same-day delivery.

These achievements are part of the projects that the Amazon team launched in 2024, but they embody our extensive innovations, hard work, and thoughtful execution across various business areas. Deep gratitude is expressed for the team's efforts and achievements over the past year (some of which are reflected in our 2024 performance, while others may not become apparent for years to come).

A culture of 'why.'

Each year in my annual shareholder letter, an attempt is made to share some core principles that keep Amazon operational. At the highest level, our goal is to become "the most customer-centric company on Earth," working every day to make customers' lives better and easier. This is itself not an easy task, let alone maintaining it year after year. In reality, it is quite challenging, especially against the backdrop of rapid technological advancement, constantly changing customer habits, and the continuous launch of new products by both large and small companies. If there is a desire to have the chance to achieve this mission, it is necessary to constantly question everything around.

Amazon has consistently adhered to a long-term philosophy: distinguishing between "two-way doors" and "one-way doors" in decision-making. A "two-way door" decision refers to decisions that, if they go wrong, can still be reversed, returning to the original state with almost no serious consequences. These types of decisions can be made quickly and locally. Conversely, a "one-way door" decision means that once passed, it is difficult (if not impossible) to go back, which requires careful deliberation in decision-making. However, both types of decisions assume the door is open. Much of innovation is essentially an attempt to open those doors that appeared to be tightly locked long ago.

Over the past 30 years, we have discovered that one of the most important keys to unlocking these doors is actually a simple question: "Why?"

"Why must this customer experience be like this?"

"Why can't it be better?"

"What are the limitations we face - why must we accept them?"

"Why can't we innovate around it?"

"Why does it take so long to get this to the customer?"

Why.

My dad often says that when I was young, I was the kind of kid who always loved to ask 'why'—sometimes so much that it could be annoying. He often reminded me that shortly after I joined Amazon in 1997, he tried to persuade me to work at a more traditional company (preferably on the East Coast, closer to home)—until he realized that I had already found the place that suited me best.

That's because Amazon itself is a 'why' company. We constantly ask questions like 'Why?' and 'Why not?' These questions help us break down problems, trace back to the roots, understand obstacles, and open doors that once seemed impossible to break through. Amazon has an exceptionally high 'Why Quotient' (let's call it YQ), and this YQ also forms the framework through which we view everything.

Since 1995, we have been asking:

'Why can't we provide customers with all printed books?'

Then we asked, 'Why limit it to printed books? Why not also provide all out-of-print books?'

'Then why not go further and put all books—no matter what language they are written in—into a lightweight, hand-held device that can access them in 60 seconds?' (That's the Kindle.)

When we provide reviews, we ask, 'Why can reviews only come from so-called professional 'experts'? Customers themselves are a great resource and will be very honest. Why not include customer reviews, even if they sometimes discourage a purchase?'

“Why only sell books?”

“What about music, videos, electronics, tools, kitchen supplies, clothing, and housewares?”

“Why not sell almost everything?”

“Why are we the only ones who can sell these products? There are millions of third-party merchants and small sellers who also have similar or unique products. Why not let customers choose the products, prices, and delivery speeds they want from these sellers?”

After spending years working to enhance customer recognition of products from these sellers, we asked ourselves:

“Why not directly display these third-party products on the product detail page, alongside our self-operated products? (After all, that's where all the traffic is concentrated.)”

So why not allow our sellers to store their products in our fulfillment network? This way, these products can enjoy fast Prime delivery services and be shipped by us (this is the "Fulfillment by Amazon" program).

Why not try displaying related advertisements in our store, allowing customers to discover new sellers and products (rather than just relying on algorithms recommending content based on their past purchase history)?

Why does every company need to build its own capital-intensive datacenters and infrastructure?

Why does every development team have to repeat building services such as computing, storage, databases, and analytics?

Why do builders spend 80% of their time on these "non-differentiated heavy lifting" tasks instead of focusing on creating unique customer experiences?

Why don't we build a set of services (AWS) to help both internal and external builders solve these problems?

Why do I have to buy physical movies to watch a film?

Why do I have to use cable television or traditional channels to see great TV shows (Prime Video)?

Why can my Prime delivery benefits only be used on the Amazon website? Why can't they be used on other websites as well (Buy with Prime)?

I could go on and on, but you already understand.

Each of these 'whys' has sparked significant innovations, each of which has made customers' lives better and easier. Some may seem obvious now, but at the time, these were challenging questions that required curiosity, the courage to take risks, a spirit of continuous experimentation, and relentless effort to turn them into success stories.

How to build a culture of 'why'.

If you believe that a high 'why quotient' (YQ) is crucial for creating innovations for customers, how can it be inspired and nurtured?

In my view, this cannot be solved by a single method. It must be deeply embedded in your culture and leadership team, and once you are fortunate enough to achieve success, this culture must be steadfastly protected over the long term. Here are some strategies we have adopted.

Establish leadership principles that set the tone.

We have developed 16 leadership principles to guide our behavior. They are all core elements that support our 'why culture' (YQ), but I would particularly like to emphasize three of them:

Are Right a Lot.

Leaders are often right. They possess excellent judgment and keen intuition. They actively seek diverse perspectives and strive to disprove their assumptions.

When we first introduced this leadership principle, some people mistakenly thought it meant "the best leaders are those whose ideas are always adopted" (that is, "they are often right"). As a result, some people became overly insistent on their views and unwilling to compromise. There is nothing wrong with holding firm beliefs, but in my experience, the best leaders are those who are willing to listen to others' opinions. They do not shrink away or become angry when questioned; instead, they become intrigued.

Effective leaders change their views when new, persuasive information arises (this is also why politicians are ironically mocked for being "flip-floppers" when they change their positions). Ultimately, it is the leader's responsibility to find the optimal solution for the customer, rather than who originally proposed the idea.

Learn and Be Curious

Leaders never stop learning and are always seeking self-improvement. They remain curious about new possibilities and actively explore.

In my 28 years at Amazon, the biggest factor determining the difference between corporate and personal growth is the ability to learn. At some stage, some leaders seem to lose their desire to learn. The reasons vary; some may find learning too exhausting or time-consuming, or they might feel uneasy or even threatened when they no longer have all the answers.

However, if one day Amazon stops learning, that will be the day we begin to weaken our future potential. Those with high curiosity are always eager to know how they can do better, become wiser, and translate new knowledge into better customer experiences.

Stand your ground; express dissent when necessary and commit to execution.

Leaders have an obligation to respectfully and clearly challenge decisions they do not agree with, even if doing so is uncomfortable or exhausting. Leaders have convictions and resilience. They do not compromise for the sake of superficial harmony. Once a decision is made, they are fully committed to its execution.

We not only empower employees to challenge each other but also require them to do so when there are disagreements. If there is disagreement, questions should be raised, sharp inquiries should be made, and in-depth discussions should be pushed—rather than silently assuming the team is making mistakes. This approach can lead to better solutions for customers. At Amazon, phrases like 'I already told you' carry no value.

At the same time, the second part of this principle is equally important: 'Express disagreement, and give full commitment once a decision is made.' While constructive debate is highly valuable, the team ultimately needs to make decisions and take action at some point. From that moment on, everyone—even those who advocated for other options—must commit to making the chosen solution successful.

That is to say, the team must be fully committed, negative resistance is not allowed, and they should not waver between options. This is the only way to maintain decision-making efficiency and team confidence, especially after thorough debates, ensuring that everyone can move in unison.

Establishing behavioral norms that support a 'Why Culture.'

Just as leadership principles guide our behavior, over the years, we have also established some 'team norms' that guide the way we work. Here are a few examples:

Narrative documents.

As early as 2004, we stopped using PowerPoint for internal information reporting. We found that while PPTs are easy to prepare for the presenter, the content is often too high-level and abstract, making it difficult for the audience to grasp the core issues. Therefore, we shifted to using narrative documents with a maximum of six pages of main text for communication.

Writing a narrative is more challenging for the presenter (creating a concise, clear, in-depth, and focused six-page document is no easy task), but it makes it easier for the audience to grasp the key points and think deeply, thereby raising the correct 'Why' questions.

Working Backwards Documents

When developing a service or feature, we first write a 'press release' and a 'Frequently Asked Questions' (FAQ) document before writing the first line of code.

The purpose of the press release is to ensure that what we intend to develop is truly valuable and exciting for customers (rather than waiting until the release to ask, 'Wait, why did we think customers would be interested in this?').

The FAQ is meant to force us to think about some tough questions, such as: Who will use this feature? What do they like most? What are they most likely to be disappointed about? Why do we set the boundaries of the feature here? What makes it better than existing alternatives? How should we think about pricing? What pricing dimensions should we recommend? Why did we make the architectural design choices we did?

The press release and FAQ represent our 'customer-centric, backwards-driven' way of working, which also prompts us to ask those questions that customers would surely raise in a meeting.

Be Together Whenever Possible

There are many paths to breakthrough innovation. Sometimes, there may indeed be a genius who comes up with a brilliant idea alone, while others simply need to execute it. However, this is not the typical operating mode at Amazon. Innovation at Amazon is highly collaborative; it begins with a spark of an idea, followed by a group of smart, mission-driven people refining, challenging, and continually expanding it together.

We have found that this process is far more effective in 'face-to-face' settings than in remote collaborations. Of course, remote work can also foster innovation (some company cultures even prefer it), but in my experience, it doesn't match the effectiveness of being in the same room: that sense of energy, rhythm, impromptu brainstorming, active participation, ideas evolving on-site, and the efficiency of rapidly iterating afterwards all contribute to better outcomes for customers and the team.

Considering the rapid development of AI and that almost every customer experience could be redefined, now is the time we need to optimize for 'efficient innovation' more than ever before.

Tolerating Messy Meetings

Innovation cannot be scheduled. You can't book 60 minutes to invent Amazon Prime, AWS, Alexa+, Amazon Logistics (FBA), the regionalization of the fulfillment network, or the Kuiper project. These innovations often come from someone asking the question, 'Why can't we redefine possibilities for customers?' Then they seem to take on a life of their own, often leading down many winding paths, even dead ends, before finally finding the path to success.

This may disturb some who prefer process norms. But when we are in a state of innovation, we are willing to accept the imperfection of this process—and appreciate its 'beauty in chaos.'

Operate like a startup (in our case, the world's largest startup)

We always strive to operate like 'the world's largest startup.' So, what does that mean?

First, any product or service we consider developing must focus on solving a real customer problem or significantly enhancing the customer experience. Some companies stray off course because they are excited about a technology and prioritize 'the technology itself.' Outstanding startups always make it their mission to 'redefine possibilities for customers.'

Second, our need for 'builders' far exceeds that of conventional businesses. These individuals are innovators—they continuously dissect customer experiences, and even when the current experience is quite good, they still ask, 'Why can't it be better?'

They are inherently dissatisfied with the status quo (which may annoy team members who take pride in existing achievements), and they never feel that things are complete.

Third, we need "owners." One of Amazon's key advantages over the past thirty years is that we have attracted a large number of smart, motivated, creative, and ambitious talents who possess a strong sense of ownership.

This means that our team members constantly ask themselves, "If this money were my own, what would I do?"

"If this were my company and I was the largest shareholder, how would I make decisions?"

"Although I am only assigned to a part of the project, I am unsure if the other parts are being done well - should I intervene to check and ensure there are no problems, or should I trust that others will handle it?"

True "owners" hold themselves accountable. They care deeply about the quality and effectiveness of what they are responsible for, viewing the company's mission as their own mission (we want "missionaries," not "mercenaries"). This is also one of the reasons we strive to increase the ratio of "individual contributors" to "managers." We hope to create a flatter organizational structure that allows those who are truly hands-on, the "owners," to lead the "two-way door" decision-making (which accounts for the vast majority), act quickly, and take full responsibility for every "why" in enhancing the customer experience.

Fourth, speed is disproportionately important for all businesses in any industry and at any time.

"You must either be fast or hold high standards" is a false dilemma. If you want to be fast, you can absolutely do so while ensuring high quality. We have been doing this for many years (even though we still have room for improvement).

Speed is a leadership decision. The leadership team must truly believe in its importance, continuously reinforce this culture, optimize the organizational structure, remove structural barriers that hinder processes, and build systems in a modular way to support rapid advancement.

But if the entire company and culture do not collectively embrace "speed," then speed cannot be achieved. At Amazon, regardless of the business area, we always have a sense of urgency—every opportunity window around us is closing rapidly. We are in an extremely competitive market environment, surrounded by talented, well-funded, and ambitious companies. Customers are always looking for better options.

We spend a lot of time thinking: How can we unlock these experiences for customers faster?

We are well aware: If we do not do this, then someone else undoubtedly will.

Another way to enhance speed is to eliminate bureaucracy. There is a distinction between processes and bureaucracy. When operating a business at scale, some mechanisms are indeed needed to ensure the correctness and continuous optimization of customer experience. However, as the company grows and management increases, some unnecessary processes also accumulate, which provide almost no real value.

Last autumn, I invited colleagues from various teams within the company to send me examples of bureaucracy they encountered. I received almost 1,000 emails, each of which I read carefully. Builders hate bureaucracy—it slows down the pace, causes frustration, and hinders them from doing what they truly love.

As leaders, we may not always see the red tape hidden deep within the organization, but once we do, we must decisively eliminate it. To date, we have made over 375 changes based on this feedback. We must accelerate our pace of action and commit to continuously rooting out those bureaucracies that waste time and dampen morale.

Fifth, maintain a "grassroots spirit." As companies succeed and scale, many forget how they started. We initially developed Amazon S3 (Simple Storage Service) with 13 people and Amazon EC2 (Elastic Compute Cloud) with 11 people.

Some managers may mistakenly believe that expanding the team is the only way to grow the business. We have historically had a period dominated by this mindset. However, this is not the fundamental way Amazon builds teams and products; we have readjusted and returned to the essence. Our best leaders are often those who achieve the most work with the least resources. They take pride in being "efficient and lean."

Sixth, you must dare to take risks. It sounds easy, but it is difficult in practice. You need smart enough talent to identify opportunities worth betting on. And when you have these high-standard, creative, and ambitious builders, they often are not accustomed to failure. They worry that if the attempted innovation fails, they will be questioned and ridiculed by the outside world (or even internally). Therefore, many choose to play it "safe."

However, if you only aim to "not lose," you cannot create truly extraordinary value for the customer.

If the "why" you propose leads you down an innovative path that no one has taken before, let "customer first" be your guiding principle. After all, it is difficult to change the world by repeating others' paths.

Finally, what you must care most about is delivering attractive results for customers. It is not about how charming you are or how skilled you are at managing upwards or laterally. What really matters is what we have truly accomplished for our customers. This is what we hope to reward.

The Next Generation of "Why"

Although my team and I feel very optimistic about the progress and potential of the existing business, we still have many new "whys" we are considering. Here are some of those questions and our preliminary thoughts on them.

Why is AI so important? Will it really have the huge impact that some claim? When will it be realized?

Generative AI will redefine almost every customer experience we know and bring about entirely new experiences—those that previously existed only in imagination.

Currently deployed AI applications primarily focus on improving efficiency and reducing costs, such as customer service, business process automation, workflows, and translation, which have already saved businesses a significant amount of expenses.

In the future, AI will gradually change conventional patterns in programming, search, shopping, personal assistance, basic medical care, cancer and drug research, biology, robotics, aerospace, financial services, neighborhood networks, and more. Some areas have already started to evolve rapidly, while others are still in their early stages.

But one thing is for sure:

If your customer experience has not yet planned to leverage these intelligent models—they can query vast amounts of data, quickly identify key points, and continuously become smarter through feedback and data, even developing autonomous action capabilities—then your products and services will lack competitiveness.

How long will it take to achieve this? It won't all happen in one or two years, but it also won't take as long as ten years. The development speed of AI is almost greater than any technological advancement in history.

Well, I believe AI is important; but why invest so rapidly and at such scale?

Fundamentally, if your mission is to 'make customers' lives better and easier every day,' and you believe AI will redefine every customer experience, then you must invest deeply and broadly in the field of AI.

This is precisely why Amazon is currently building more than 1,000 generative AI applications, covering multiple fields such as shopping, programming, personal assistants, video and music streaming, advertising, healthcare, reading, and smart home devices, all aimed at fundamentally improving the customer experience.

This is also why AWS is rapidly developing key "primitives" (essential building blocks) to support AI, including:

• Amazon Trainium: Custom AI Chip for better cost-effectiveness in training and inference;

• Amazon SageMaker and Amazon Bedrock: Platform services for flexibly building and inferring AI models;

• Amazon Nova: Our self-developed cutting-edge model that helps customers reduce costs and latency;

• Agent creation and management capabilities: Driving AI systems to automatically complete complex tasks.

This wave of AI also requires massive capital investment.

At AWS, the faster demand grows, the more data centers, chips, and hardware we need to procure (and the cost of AI Chips is much higher than traditional CPU). These capital expenditures need to be made in advance, even though these assets will continue to play a role for many years (for example, data centers have a lifecycle of at least 15-20 years).

We only start to monetize after investing capital for "months or even longer," and it takes years to recover, which brings about highly attractive long-term free cash flow and ROI—just as AWS has demonstrated in recent years.

However, during this period of extraordinarily strong demand, we are investing a significant amount of capital. Our AI revenue is currently expanding at a triple-digit year-on-year growth rate, with annualized revenue reaching billions of dollars.

We firmly believe that AI represents a historic opportunity to change everything we know. The customer demand it generates is unprecedented, and we are accelerating investment for the long-term interests of customers, shareholders, and the business.

Why are chips and AI so expensive for customers?

AI doesn't necessarily have to be as expensive as it is now, and it won't always be this way in the future. The biggest culprit for the current high costs is chips. So far, most AIs are built on the foundation of one chip manufacturer, and its price is not cheap.

The Trainium chip we launched is expected to bring changes—especially our Trainium2, which offers a 30-40% improvement in cost-performance compared to the currently widely used GPU computing instances.

Although model training still accounts for a significant portion of current AI costs, in the future, inference—specifically, the predictions and outputs of models—will become the absolute Block Orders of AI costs. This is because customer model training is periodic, while inference occurs continuously, especially in large-scale AI applications.

Inference will become another foundational service module, just like computing, storage, and databases. We feel a strong sense of urgency about this—we must quickly reduce inference costs for customers.

More cost-effective chips will bring assistance. At the same time, model distillation, prompt caching, optimization of computing infrastructure, and advances in model architecture will significantly improve inference efficiency in the coming years.

Reducing the unit cost of AI will unleash greater demand from customers for AI applications, and will also drive overall growth in AI spending. This trend is akin to the development path of AWS: by revolutionarily reducing computing and storage costs, we achieved lower unit expenses, thereby promoting more innovation, better customer experience, and higher overall infrastructure investment.

Why has personal assistants not really become widespread to date? How does Alexa play a role?

An excellent personal assistant should be able to answer almost any question and also represent you in completing various tasks. So far, no digital solution has been able to achieve both of these points—until the emergence of Alexa+.

Alexa+ not only matches the leading chatbots in terms of intelligence but more importantly, she can perform a variety of real operational tasks for you:

• Play music and videos

• Switch media content between devices

• Set alarms and timers

• Control Smart Home devices.

• Order and purchase from billions of e-commerce products.

• Book Restaurants and ride services.

• Order concert tickets.

• Remind you when your favorite artist announces a tour.

• Find a plumber to fix the sink.

• Remember everything you have done on Amazon.

This is a revolutionary change for consumers, and this is just the beginning of Alexa+.

Currently, there are over 0.6 billion Alexa devices globally, and we expect that in the future, Alexa+ will play an even more central role in the lives of these hundreds of millions of customers.

Why can't we deliver commodities faster? Does it really matter?

Every year, people ask us whether the delivery speed has reached the limits of diminishing marginal returns. Our data shows that it has not at all.

When we commit to faster delivery times, the proportion of customers completing their orders significantly increases, and shopping frequency on Amazon also rises.

The original commitment of Amazon Prime was: unlimited free delivery within two days for one million products; it has now expanded to over 0.3 billion products, with tens of millions available for delivery within one day or even shorter times. More and more orders can now be delivered on the same day.

This speed increase is mainly due to our regional restructuring of the fulfillment network, a new inventory allocation algorithm, and the introduction of innovative Same-Day Fulfillment Centers.

Although we have set delivery speed records for two consecutive years, these innovations are still continuously being optimized, and there are more plans in progress. Don't forget about our Prime Air Drone project, which will deliver products to customers within an hour.

Regarding delivery speed, we are far from finished.

Why can't users in small towns enjoy the same fast delivery speed as users in cities?

While some companies abandon small-town customers due to high service costs, Amazon chooses to do the opposite — we are increasing our investment to better serve customers in remote areas.

We have expanded same-day and next-day delivery to dozens of small cities and towns across the USA, and we are still continuing to expand. This expansion will bring faster Amazon delivery services to millions of customers, especially in areas with low population density.

In the future, we will be able to deliver over 1 billion packages each year to customers living in 13,000 zip codes covering an area of 1.2 million square miles.

Relatedly, why can't we help the hundreds of millions of people without broadband connections?

Globally, there are about 4 to 0.5 billion households, mostly located in remote small towns, that cannot access broadband networks. They cannot conveniently use the Internet for learning, shopping, doing business, obtaining entertainment content, or communicating with others like people in big cities.

This is precisely the problem that we aim to solve with Project Kuiper — a low Earth orbit satellite network.

We have just launched the first batch of mass-produced satellites, and in the coming years, we will have more than 3,200 satellites in orbit.

Despite the high launch costs, we believe Kuiper will ultimately become a Business with considerable operating profit and return on investment.

Why must Medical Services be so anxiety-inducing?

In the USA, the medical experience is frustrating—especially in primary care. It is often very difficult to schedule an appointment with a doctor, and getting an appointment with a specialist is even harder.

A lot of time is spent on 'waiting', while the actual communication time between doctors and patients is very limited. Afterward, patients have to drive to another location (which is often not nearby) to pick up their medication. When they get to the pharmacy, they are often troubled by drug prices, insurance coverage, and certain 'medications locked in cabinets'.

Customers deserve a better experience.

This is also why Amazon Pharmacy and Amazon One Medical have received positive customer feedback and rapid growth. We will continue to accelerate the optimization of pharmacy product selection and price transparency while expanding One Medical's physical clinic service capabilities.

These are some of the 'whys' we are currently asking ourselves. I am looking forward to future innovations—we are destined to not be boring.

When I first started working, I found it hard to imagine that my father had worked at the same company for 45 years. At that time, I thought, 'How is that possible? That's too long.'

I often tell my friends, "I would never do that."

Now, after nearly 28 years of working at Amazon, I have to face my friends' reverse question of "why."

After all these years, why are you still at Amazon?

I am certainly a "super fan," but there are indeed many compelling reasons to work at Amazon.

First, I am not sure if there is any other company that is as obsessively customer-focused as we are. Many companies say this, but few truly deliver.

Second, it is indeed not easy to find a company in this world that allows you to make a greater impact.

Third, we make long-term, in-depth investments in innovation and talent. This allows our team to constantly refine ideas and make genuinely long-term decisions for customers and the company.

Furthermore, I have never seen a group of people like our Amazon team — they are smart, creative, ambitious, eager to break through, hardworking, and mission-driven.
I believe this is the most remarkable set of qualities a business can possess.

For those builders who want to change the world and are passionate, there is no better place than Amazon.

Our ability to operate like the "largest startup in the world" is largely due to our "Why Culture."

We do not always get things perfect, but we learn crazily, iterate, continuously choose to put customers first, pursue excellent delivery, an innovative spirit, ownership, speed, a grassroots spirit, and curiosity, dedicated to building a company that can surpass each and every one of us.

For us, it is still Day One.

Sincerely,
Salute!

Andy Jassy
President and CEO.
Amazon.com, Inc.

Note: As always, we have attached the original shareholder letter from 1997 at the end of the letter. The content remains as true as ever today.

Editor/rice