11:41 AM EDT, 04/11/2024 (MT Newswires) -- Amazon.com ( AMZN ) is "deeply investing" in generative artificial intelligence, which Chief Executive Andy Jassy said could be the biggest development in technology since the internet, while the e-commerce giant looks to lower fulfillment costs and speed up deliveries.

In his annual letter to shareholders for 2023 that was published Thursday, Jassy said they're making custom AI training and inference chips to build foundation models, which are networks used to generate output from prompts. It's also building AI applications for consumers, including its Rufus shopping assistant and a "more intelligent and capable Alexa," the company's virtual helper, Jassy said.

"Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the internet," the CEO wrote. "Unlike the mass modernization of on-premises infrastructure to the cloud, where there's work required to migrate, this GenAI revolution will be built from the start on top of the cloud."

While Amazon ( AMZN ) is spending on AI, the company is looking to lower expenses elsewhere. Cost to serve was down $0.45 a unit in the US year over year in 2023, as Jassy cited Amazon's ( AMZN ) efforts to store items closer to customers in a regionalization shift and the expansion of same-day shipping facilities.

"We've challenged every closely held belief in our fulfillment network, and reevaluated every part of it, and found several areas where we believe we can lower costs even further while also delivering faster for customers," Jassy said. "Our inbound fulfillment architecture and resulting inventory placement are areas of focus in 2024, and we have optimism there's more upside for us."

Last week, Amazon Web Services eliminated hundreds of jobs in sales, marketing and global services. In January, its Twitch livestreaming unit cut staff, and CNBC reported at the time that Audible, Prime Video and MGM Studios units were also reducing workers. Jassy said in March last year that Amazon ( AMZN ) would cut as many as 27,000 positions.

Amazon's ( AMZN ) sales were up 12% in 2023 to $574.79 billion, while operating expenses -- including cost of sales and fulfillment -- rose to $537.93 billion from $501.74 billion.

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