Amazon Web Services CEO Adam Selipsky speaks at CERAWeek at the S&P Global Conference in Houston on March 7, 2023.
F. Carter Smith | Bloomberg | Getty Images
Amazon’s cloud division announced Thursday that it will allocate $100 million to a center to help companies use generative artificial intelligence, a technology that has become widespread in the months since OpenAI made its ChatGPT chatbots available to the public.
That’s a small investment for a company with $64 billion in cash and $5 trillion in annual operating expenses. But the announcement shows that Amazon Web Services, along with rivals Microsoft and Google, recognizes the importance of the moment in generative AI and the importance of joining the conversation.
“You ask yourself: Where are the various runners on the third step of a 10km race?” AWS CEO Adam Seripsky said in an interview with CNBC this week. “Does it really matter? The point is, he’s three steps away and he’s a 10-kilometer race.”
As part of its latest announcement, Amazon said it will add data scientists, engineers and solutions architects to its salary structure. AWS says the center is already working with two customers, Highspot and Twilio. The company told CNBC that this is a “program” rather than a physical center.
After defeating Microsoft and Google in the business of renting servers and data storage to businesses and other organizations, Amazon maintains a commanding lead in the cloud infrastructure market. But despite Amazon’s extensive use of AI for years to display shopping recommendations and control the Alexa voice assistant, these rivals have made big forays into generative AI.
Microsoft has invested billions in multi-layered partnerships with OpenAI, and Google is moving rapidly to roll out its own AI tools to consumers and businesses.
Amazon also doesn’t have the first widespread large-scale language model that enables chatbots and document summarization tools.
Selipsky said he wasn’t worried. He joined the company in 2005, one year before he launched AWS’s core compute and storage services. Following in the footsteps of Amazon founder and longtime CEO Jeff Bezos, Selipsky said the company has thrived by listening to its customers.
“There are many examples in Amazon’s history of claiming a strong belief in being customer-focused, working with customers, and building what they want,” Selipsky said. “And if people want to perceive us a certain way, we’re misunderstood, but as long as the customer understands where we’re going, that’s fine.”
One of the challenges Amazon currently faces is meeting the demand for AI chips. The company has chosen to start building chips to complement the graphics processing units from his Nvidia, a leader in the field. The two companies are competing to supply more to the market.
“Right now, I think there is a short-term global shortage of computing power to run generative AI and machine learning in general,” Selipsky said. People are panicking and the situation will improve in the coming months, he added.
Selipsky also sees a slowdown in customer cloud spending as businesses prepare for continued economic uncertainty.
“Many customers are almost done optimizing their costs, while others are still in the middle of it,” he said. “It’s hard to predict exactly when that particular trend will end, but we’re still in it.”
Still, he argues that the AI trend is real. For Amazon, that momentum extends to its Bedrock generative AI service and Titan model, as well as its new innovation center.
“AI will be the next wave of innovation in the cloud,” he said. “This will be the next big thing that will make more customers want to use the cloud. Generative AI really needs the cloud.”
And in Selipsky’s view, AWS offers a certain amount of credibility in delivering generative AI that is unrivaled in this space.
“I can’t tell you how many Fortune 500 companies I’ve spoken to that have banned ChatGPT within their companies,” Selipsky said. “Because at least that early version had no concept of enterprise security.”
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