Then, when Microsoft Corp. partnered with OpenAI, there were concerns that AWS would lose market share as companies rushed to take advantage of the artificial intelligence offered by Amazon's biggest cloud competitor.
Jassy, who was instrumental in AWS's rise as the division's CEO before taking the top job, remained calm. He assured investors that Amazon has been working on AI for years, long before ChatGPT ignited the tech industry with its promise of world-changing potential.
Amazon's message is that while OpenAI may have grabbed the headlines, investors should think of AWS as the Swiss Army knife of AI, allowing businesses to move sensitive data from one cloud provider to another. The idea was to run any number of cutting-edge AI models without having to worry about. another.
Amazon is already using Microsoft-developed Trainium and Inferentia chips to address concerns about the availability of computing power, which had increased the cost of acquiring Nvidia's hardware for AI training and inference. and manufactured their own hardware for those purposes. Others are rushing to catch up. Underscoring its seriousness about AI, Amazon announced it would buy a stake in leading AI maker Anthropic for his $4 billion and run its workloads on his AWS.
The company's first-quarter results released Tuesday showed those investments are starting to pay off, spurring after-hours stock gains, up as much as 6.5%.
Jassie's reassurances are accurate and better times are on the horizon. AWS has seen accelerating revenue growth for his second consecutive quarter, Jassy said, with customer interest in AI contributing in large part. AWS's annual revenue now stands at $100 billion, of which “several billions of dollars” represent her AI spending.
As Jassy predicted, customers who were pulling back on cloud investments in pandemic “survival mode” are starting to pick up the pace and shift more spending to the cloud.
“I think at a macro level, people are moving towards newer efforts to modernize their infrastructure and try to create value from generative AI,” he said on a conference call to discuss the results.
AWS' operating margin for the quarter was a record 37.6% due to cost reductions and increased demand. Overall, Amazon's cloud business “has come back from a pretty tough year,” Jefferies analyst Brent Till said. bloomberg tv.
“Investors aren't paying to have Twinkies or toilet paper delivered to their door. They're paying for a high-margin recurring business like AWS.”
A strong quarter could mean Amazon can get away with vague announcements like saying it will “significantly” increase capital spending this year to pay for all of its AI infrastructure without providing any numbers. It meant that.
Unlike Meta Platforms, which was penalized for saying it would spend more, Amazon can get away with a larger investment because it has a strong presence at multiple layers of the AI ”stack.” It is the top layer for developers working with AI and consumer software applications such as chatbots.
All of this gives Amazon an excellent position in this fiercely competitive AI crowd. While the initial money is being made at the bottom and middle, there's no reason Amazon can't have a dominant presence in consumer AI as well. This week the company unveiled a full competition to Microsoft's code-writing AI assistant. Co-pilot.
In other words, Jassy took control of the plan and left both the shovel sales and the gold mining to Amazon.
