The Exchanges

Q of the other open questions that people have wondered about is, um, does all of the value creation in the ecosystem go to, um, Um, your compute vendor, and eventually a big piece of it over to Jensen and NVIDIA, or to the model vendor, and I, I think the, the answer, at least to like right now, is clearly not, right? I think there's different, there's capture different levels.

A There's probably enough for everybody. Uh, today, most of it does go to NVIDIA, I think. That's, that's a lot of it, but I just think that's because it's where it is early in the cycle. Uh, you know, I think, um, uh, and they've built some incredible technology that's enabling some really cool stuff, so I think that that's, it's, it's, Um, it's fine. And at some point it's going to be the, the companies that find out how you actually go solve real problems and deliver real value to enterprises and to customers and other things like that. And that's going to be that, you know, I, I see a lot of, if I, if I take a step back and see who's implementing AI out there, It's a lot of enterprises that are doing proof of concepts and, and a lot, and sometimes they'll find one that really works well and it'll go to production. And I think if you can have a startup that can make that part easier, that says, look, this is a real value, right? It's not a chat bot on your website, but it's something that helps you go faster, make sales better, innovate more rapidly, um, you know, do something you were never able to do before, uh, improve manufacturing efficiency, whatever that is the startup is focused on. Or the company is focused on for that matter. It's, it's that, it's going to be an application level, right? It's most, most people don't, um, build a CRM from scratch. They go use a Salesf…

AI assessment note: “today, most of it does go to NVIDIA, I think.”

Q If we were to abstract out a level and, uh, you know, ask what you, what your vision is, or how are you thinking about the next three to five years of AWS more generally as a business? What are the key things or areas of focus for you?

A Well, this is one. I think, I mean, I'm, I'm just as excited about generative AI and, and AI broadly as, as you all are. Um, I do think that it's an enormous opportunity for us and for our customers to, and, and I think it actually, in many ways, it has a positive flywheel effect and is, can be a tailwind to some of that first stuff that we were talking about a little while ago about helping customers move to the cloud. You know, I think if we think about where can generative AI help, some of that can be like, how do you make that go faster, right? How do you, Take some of that more, you know, our original AWS thesis was we take care of the muck so you don't have to. There's still a lot of that that customers have to do today that I think generative AI can help with. And so over the next three to five years, there's a big investment for us in both building that tool set, building that whole platform that we're talking about so that customers don't feel like they have to go manage a bunch of these pieces. They don't, and they don't have to think about, you know, GPUs, or they don't have to think about how do they think about kind of tying these clusters together or whatever. All of that can be abstracted away. If you think about the start of what Bedrock is, if you go use Bedrock models today, You never interact with the GPU, right? You just, you send it tokens, you get tokens b…

AI assessment note: “over the next three to five years, there's a big investment for us”

Q What do you think is, um, you mentioned that, you know, 80% of workloads still haven't migrated over. Um, what, what do you think are the main blockers to that today? Is it just momentum? Are there specific features? Are there big things still to build?

A There's some technologies that, you know, I think it, look, if I had an easy button and, and by the way, we're trying to build an easy button, but, uh, but if I had an easy button that would just migrate mainframes to a modern cloud architecture today, almost everyone will push that button, but it doesn't quite exist today. And it's not as simple as like, great, I'll go run your mainframe in the cloud. Like that's not what customers want. They want to actually modernize those workloads and have them into, you know, microservices and, and Canadianized workloads and other things like that. So that's, that's one is there's just a bunch of workloads like that, that Are old and, and their customers running a big SAP thing and they want to move it to the cloud, but it just takes time because it's tied into a bunch of other things like that. There's also a bunch of workloads that as you get out of core IT workloads that are in line of business that are the next set of things. And whether that's, um, you know, say telco workloads, right, that are, that are running kind of the, the five G infrastructure around the world. Um, we've slowly been moving those to the cloud and helping those customers get that flexibility and, uh, and that agility of, Of running those in the cloud as well, but they're slower to move. Um, if you think about all the compute that runs, uh, factories out there to…

AI assessment note: “if I had an easy button that would just migrate mainframes to a modern cloud”

Q there's certain aspects of fine-tuning and other things that people are increasingly doing over time. There's other parts of it, like eval suites, and what are the main building blocks that, uh, you can talk about in terms of things that are either coming to AWS, or how you think about that more fragmented world of all these different components and how they fit together relative to AI workloads today?

A That is kind of the idea of Bedrock, is that we want to make it easy to do, and I do think actually, in many ways, today the models is the front and center thing that everybody pays attention to, but I think increasingly it'll become a smaller percentage of the thing that people pay attention to, because people are going to care about Whether it's RAG or some other sort of knowledge base, so we call it knowledge bases because it's, you know, the technology may change over time under the covers, but that like, how do you have a grounding set of truth that you use? I also think grounding data is an interesting thing for, um, for like real-time information that you want as part of your AI systems. Um, we have things like guardrails, which is our, our customers find incredibly important because, you know, if you're building a chatbot on a financial services website, you can actually get, find a lot of money if that thing starts giving out financial advice. And you, and so you really want to be able to control, let alone, you know, going down and talking about politics or something else that you definitely don't want to talk about. Um, and so those guardrails are super important as people think about what they want their AI systems to do and interact with and where they want to stay away. This is not controversial. I'm sure you, you both hear a lot about this, but again, the next ge…

AI assessment note: “That is kind of the idea of Bedrock, is that we want to make it easy”

Q have been building Tinium chips and other things, which I think is really exciting to see that evolution. How do you think about future, uh, GPU shortages? Does that go away? When I'm sort of curious about how you think about forward looking capacity and is the industry actually ready in terms of Building out data centers, building out semiconductors, all the rest of it. Packaging, you know, the whole.

A Um, look, I, I think we're probably going to be in a constrained world for the next little bit of time. Just, you know, that some of these things are, they take time. Like, like, look how long it takes to build a semiconductor fab. Like, it is, it's not a short lead time, and that's several years, and, and TSMC is running fast to try to ramp up capacity, but it's not just them. It's the, The memory providers and, and the, and frankly data centers that we're building, right? And so, as we think about, um, there's a lot of pieces in that, in that value chain that I think, as you look at the demand for AI, which has been, um, How an exponential might be undershooting it. Some of those components that support that I think are, are catching up. And I think AWS is, is well positioned to, uh, to try to do that better than others are. You know, we've, we've spent a long time thinking about, in the last 18 years, learning how do we think about smart investing? How do we think about capital allocation? We've, we've spent a bunch of time thinking about how do we acquire our own power? How do we ensure that it's Green and carbon neutral power, um, all super important things. And we're the largest purchaser of, of renewable energy, um, over the last, uh, new, new contracts, right? So actually going out and adding and, and supporting new renewable energy projects. We're the largest provider,…

AI assessment note: “we're probably going to be in a constrained world for the next little bit of time”

Q What were the, um, other projects that you were offered at the time?

A I'd worked at startups before going to business school, and, um, part of what I was looking for is I wanted to see how larger companies did new projects and kind of entrepreneurship, if you will, inside. So there's a company, a couple of few technology companies that I looked at and, and was excited about Amazon and, There was a couple of other kind of retail businesses that, uh, I mean, there's the internships were mostly in, in retail. Um, and, uh, you know, there's some new categories that they were starting up and things like that that could have been interesting, but, um, I always also knew I wanted to go back to technology. Um, so this was, uh, far and away. It's what convinced me to come to Amazon because it, it seems so exciting.

AI assessment note: “the internships were mostly in, in retail. Um, and, uh, you know, there's some new categories”