Amazon chief executive Andy Jassy said that his company should not be counted out of the artificial intelligence race, with its future in AI-specific chips.

The business leader told CNBC on Thursday that chatbots like OpenAI's ChatGPT and others are part of the "hype cycle." 

Amazon, he said, is focused on the "substance cycle." 

Nevertheless, Jassy deemed generative AI "one of the biggest technical transformations in our lifetimes."

"And, I think it has the ability to transform, virtually, every customer experience that we know," he noted. 

Jassy said he agreed with Amazon Web Services CEO Adam Selipsky's position on the AI race.

"We’re about three steps into a 10K race," Selipsky told 2023 Collision Conference attendees last month, adding that he does nevertheless believe that generative AI "is the next big wave, and it's a really big one."

AWS is launching its own generative AI product, called Bedrock. 

"I think most people are focused on the applications, you know, things like ChatGPT brought everybody’s awareness up, but I think of generative AI as having, kind of, three macro layers," Jassy continued. "I think they’re all really big and important."

The bottom layer, he said, is the compute, and what matter there are the chips. 

Jassy noted the dominance of semiconductor provider Nvidia Corp., which has recently seen shares soar and outpaced some of the biggest names in tech and AI.

"It's why we've invested, over the last few years, in our own customized training chips that we call Trainium and inference chips that we call Inferentia," he explained. 

Jassy explained that the e-commerce giant is on the second version of the chips which will be at a "much better price-performance than you’ll find anywhere else."

"And, we're quite optimistic that a lot of machine learning and training inference will be done on AWS chips and compute," he said.