Speaker 1: Bloomberg Audio Studios, podcasts, radio news. We now want to
Speaker 1: welcome to our TV and radio audiences worldwide. Amazon's president
Speaker 1: and CEO, Andy Jesse, Great to have you.
Speaker 2: On New York. Thanks for having me. It's great to
Speaker 2: be here.
Speaker 1: Back home where you grew up at and you are
Speaker 1: unveiling generative AI infused Alexa Plus. How is this going
Speaker 1: to really well excite your customer base? What are you
Speaker 1: most excited for it?
Speaker 2: Well, you know we've had Alex has been around for
Speaker 2: ten years. We have six hundred million devices in customers
Speaker 2: homes and offices, and Alexa Plus is our next generation
Speaker 2: Alexa Personal Assistant, and she's meaningfully smarter and more capable
Speaker 2: and useful than her prior self. You can do all
Speaker 2: the things that you used to do, but every single
Speaker 2: one of those functions is better. And I can give
Speaker 2: you just an example. There are so many examples, but
Speaker 2: you know, if you have smart home controls with Alexa now,
Speaker 2: you can say, Hey, Alexa, I have guests coming over
Speaker 2: at seven pm. Could you raise the drapes, could you
Speaker 2: raise the temperature by five degrees, turn on the porch
Speaker 2: lights and the driveway lights, and put on melo dinner
Speaker 2: music in the dining room and music you're not me.
Speaker 2: I choose shop Fighters, but most people will choose Melo
Speaker 2: dining music. But you can do that all verbally and
Speaker 2: simply using conversational language like that. You don't need a nap.
Speaker 2: It just happens. And so Alexa plus, with what we've
Speaker 2: just announced and what we're launching, it really is. There
Speaker 2: have been a lot of chatbots around that are good
Speaker 2: at answering questions, but they don't take actions. Alexi plus
Speaker 2: is really Alexa is going to be the first one
Speaker 2: that not only is highly intelligent to answer various questions,
Speaker 2: but she can do so many things for you. She
Speaker 2: can play music and play video, and control your smart
Speaker 2: home and make reservations for you and hire people to
Speaker 2: fix your oven. I mean, it really is the first big,
Speaker 2: large scale practical use of gen AI. The consumers are
Speaker 2: going to be able to see and use naturally.
Speaker 1: I can see how you're going to obsess over it,
Speaker 1: whether it's ordering the latest Buffalo Wings or in New
Speaker 1: York and seeing where the best space is.
Speaker 2: To do that.
Speaker 1: But how are your stakeholders of shareholder based going to
Speaker 1: obsess about this? About gender to AI in Alexi Plus.
Speaker 1: How is that adding value for them?
Speaker 2: Well, you know, I think if you think about what
Speaker 2: Alexa allows customers to do, it makes shopping more easy
Speaker 2: because it's so much more intuitive now to buy products.
Speaker 2: It makes enjoying music easier, It makes enjoying video and
Speaker 2: streaming media better. It allows you to control your smart
Speaker 2: home in a different way. So every single one of
Speaker 2: our consumer customer experiences gets better with Alexa Plus. And
Speaker 2: then you know, of course, Alexa has its own business model.
Speaker 2: We have a brand new lineup of devices that are
Speaker 2: coming in the fall. I think that are beautiful. I
Speaker 2: think people are going to really like we have opportunities
Speaker 2: to service new products and advertising in various interfaces like
Speaker 2: our mobile and our desk top interface that's coming in Alexa.
Speaker 2: And then we have subscriptions, and you know, so I
Speaker 2: think there's a sustainable business model there as well.
Speaker 1: Talk to me about the subscriptions because you're getting it free.
Speaker 2: If you've got.
Speaker 1: Prime, I get a lot with Prime. Now are you
Speaker 1: able to increase the prices there?
Speaker 2: Do you think of Prime? Well, Prime is an incredible value.
Speaker 2: If you think about getting free shipping on three hundred
Speaker 2: million plus items. You know when we launch Prime, it's
Speaker 2: free shipping on about a million items to say, it's
Speaker 2: three hundred million items. And most of the time you're
Speaker 2: getting your products now inside of a day. And so
Speaker 2: you know, between that and what you get with Prime
Speaker 2: Video and Prime Music and the grocery subscription, and you
Speaker 2: know our unique selling events, primes and incredible values increase
Speaker 2: to add on top of it Alexa plus. You know,
Speaker 2: it's just great value. So what do they plan right now?
Speaker 2: But it's I do think Prime is unusual value and
Speaker 2: it's why people use it so expansively.
Speaker 1: And to increase that use has been this invention, this
Speaker 1: innovation of generative and that costs money. And you've actually
Speaker 1: just took to the stage yesterday to say, out of
Speaker 1: all companies, you are spending the most on AI. How
Speaker 1: much are you spending on AI?
Speaker 2: Well, you know, I think we don't disclose the exact amount,
Speaker 2: but you know we you know, we're spending a pretty
Speaker 2: significant amount of cappax and the allion's share of it
Speaker 2: is on generative AI. We've said in our aws business
Speaker 2: even though general AI for US is a many billion
Speaker 2: dollars a year business and growing triple digit percentages year
Speaker 2: over year, that if we had even more capacity, we
Speaker 2: could use it to monetize it. And we have this
Speaker 2: really interesting and very fortunate flywheel and AI inside of Amazon,
Speaker 2: which is if your mission is to make customers' lives
Speaker 2: easier and better every day, which it is for us,
Speaker 2: and if you believe that all the customer experiences we
Speaker 2: know of today are going to be reinvented through generative AI,
Speaker 2: which we also believe. You believe those two things, you're
Speaker 2: going to be building a lot of genera ABAI apps.
Speaker 2: If you build a lot of gener of aif, by
Speaker 2: the way, other companies are too on top of AWS,
Speaker 2: which is the leading technology infrastructure platform. So if there
Speaker 2: are a lot of gener of AI apps being built
Speaker 2: on top of you, you can't help but get a
Speaker 2: lot of feedback from people on how they want those
Speaker 2: building blocks that create gener AI to be better. And
Speaker 2: if you're willing to invest in those building blocks, which
Speaker 2: we are, as you know, with our own chips with
Speaker 2: Tradium and with our own frontier model with Amazon Nova
Speaker 2: and model building services and stage Maker AI and betterck.
Speaker 2: If you're willing to invest in those building blocks and
Speaker 2: you're getting a lot of feedback, they get better much
Speaker 2: more quickly, which can't help them make it easier and
Speaker 2: quicker for people to build gender AI applications, which means
Speaker 2: you get more running on the platform. So that flywheel
Speaker 2: is very unique for Amazon.
Speaker 1: The line share, though, you did say basically one hundred
Speaker 1: billion dollar run rate for CAPEX expenditure. Can you give
Speaker 1: us even like a percentage ratedown of how much that
Speaker 1: goes to distribution logistics and how much goes to AI
Speaker 1: line shares?
Speaker 2: You know, you can tell you most of it. You
Speaker 2: know most of it. You know the line shares.
Speaker 1: More than fifty Yes, is it more than eighty percent?
Speaker 2: We're playing the warmer and colder game? Yes, exactly.
Speaker 1: I love a game taught us about that capacity that
Speaker 1: you talked about. Yeah, AWS could grow even faster if
Speaker 1: you had all the chips that you needed, all the
Speaker 1: power you needed, the motherboards you needed. How much faster
Speaker 1: could a WS grow?
Speaker 2: I could. It's hard to put an exact percentage, but
Speaker 2: I do think it could be growing faster. I'm confident
Speaker 2: could be growing faster. And you know there's there is
Speaker 2: you know, for a long time, there still aren't as
Speaker 2: many chips as we all want we have. We're fortunate
Speaker 2: in that we're very big partners with Video. But then
Speaker 2: we also have our own custom AI silicon in tradium too,
Speaker 2: which we just released in Reinvent, which is thirty to
Speaker 2: forty percent more price performance than the GPU powered instances,
Speaker 2: which is a big deal at scale if you're doing
Speaker 2: gender of AI on the inference side. So we have
Speaker 2: maybe more chips than some others might have access to,
Speaker 2: but we still don't have enough. And then there's just
Speaker 2: is not enough power in the world right now, and
Speaker 2: we're all working really hard on that. I expect that
Speaker 2: to relieve some the second half of this year, but
Speaker 2: right now, and you know, the world can change, but
Speaker 2: right now we have just insatiable demand.
Speaker 1: We had amazing demand coming from Jensen Wang who had
Speaker 1: his numbers out yesterday and Nvidio. Was there a limitation
Speaker 1: on the in video chips in particular that pulled back
Speaker 1: capacity And at what point do you think can depend
Speaker 1: even more on your own in house built chips offset
Speaker 1: any of that?
Speaker 2: Well, you know, I would say, I mean there's a
Speaker 2: lot of demand for gener Ai right now. People are
Speaker 2: very excited about it. I think that all the different
Speaker 2: providers of chips have been constrained to some extent. I
Speaker 2: think some of the some of the new generations maybe
Speaker 2: have gone through different evolutions and when they're going to
Speaker 2: be released maybe a little later than people thought. There
Speaker 2: are some components like motherboards and things like that that
Speaker 2: we all use that particular ones that are in shorter
Speaker 2: supply than others. So you know, I do think there's
Speaker 2: some there are some supply chainges choose which I expect
Speaker 2: to get better. I do you know people are very
Speaker 2: excited about trainingum Too to your question and whether we
Speaker 2: could see more demand there, and we have gone back
Speaker 2: at least a couple occasions to make more trainingum Too
Speaker 2: than we'd intended because we have so much demand. So
Speaker 2: I expect the will of customers for as long as
Speaker 2: I can foresee wanting to run compute on instances that
Speaker 2: have in vidio chips. But I think a lot of
Speaker 2: the demand will also be served by training the.
Speaker 1: Customers that you couldn't serve because of the limited capacity.
Speaker 1: Is it that you just have to put it back
Speaker 1: from everyone a little bit more generally or who lost
Speaker 1: out here?
Speaker 2: Do you think it's always a combination. I mean, there's
Speaker 2: for people that just have a very small amount of
Speaker 2: accelerators that they need. They don't usually have a problem.
Speaker 2: We have something called capacity blocks. It's kind of like
Speaker 2: an on demand way to use accelerators and and generate
Speaker 2: e chips and that continues to go. It's really the
Speaker 2: folks who have built, you know, have an idea for
Speaker 2: a new application, but they need a lot of chips.
Speaker 2: Where if we don't have the capacity, we have to
Speaker 2: you know, we have to give them what we can
Speaker 2: give them and give it to them as fast as
Speaker 2: we can and push our partners to get it in sooner.
Speaker 2: And they can't get their initiatives done as quickly as
Speaker 2: they want to if the capacity isn't there.
Speaker 1: Andthropics had all the capacity it needs, you've got on
Speaker 1: a close relationship.
Speaker 2: Yeah, we have a very close partnership with Anthropic. We
Speaker 2: have this project called Project right near with them. They're
Speaker 2: building their next model, their next version of their frontier
Speaker 2: model on top of trainum to and our custom AI silicon.
Speaker 2: They're going to use over four hundred thousand trainum two
Speaker 2: chips and so yes, they have capacity. They're they're ramping
Speaker 2: up and we're excited about that partnership and what they're building.
Speaker 1: You mentioned the power side. How much is that something
Speaker 1: you're talking to the administration about. How much is the
Speaker 1: administration supportive of the buildout that you need to do.
Speaker 2: We have been talking to administration, you know, multiple administrations
Speaker 2: in this country over the years, as well as in
Speaker 2: other countries as well. And I think the power shortage
Speaker 2: really snuck up on people, you know, really right after
Speaker 2: the pandemic. And I would say that the current administration
Speaker 2: is very receptive to it. They understand the constraints it's
Speaker 2: having on the economy right now and are convicted about
Speaker 2: solving it.
Speaker 1: What about the restrictions around chips? And what's interesting is
Speaker 1: Microsoft just called on the administration today to say, this
Speaker 1: limitation on chip access for some of our close allies
Speaker 1: around the world is going to limit our global business.
Speaker 2: You are a global business.
Speaker 1: Is that something you're worried about?
Speaker 2: Hey, we are? You know. I think I think that
Speaker 2: you're really talking about that AI diffusion act, I think,
Speaker 2: and I'm going to be curious to see where that goes.
Speaker 2: I mean, it was it was enacted pretty quickly at
Speaker 2: the very end of the last administration. I don't know
Speaker 2: how this administration feels about it, but I would say
Speaker 2: that we share the concern that it has limitations on
Speaker 2: certain countries who are natural allies of the US who
Speaker 2: just to be able to do their business and those
Speaker 2: companies to be able to get done what they want
Speaker 2: to get done on top of these technology infrastructure platforms
Speaker 2: like AWS, they're going to need more chips, and so
Speaker 2: I think if we don't do it, we're going to
Speaker 2: basically give up that business and those relationships to other
Speaker 2: countries who can provide those chips, and I think we're
Speaker 2: better off being partners with them.
Speaker 1: Is it a risk to AWS.
Speaker 2: It's not so much risk. I mean, I mean it
Speaker 2: had it, you know, in the scheme of things. It's
Speaker 2: not a big swinger. But I also think that there
Speaker 2: are so many countries who are in the early stages
Speaker 2: of their economic development who both really need access to
Speaker 2: the most cutting edge sophisticated technology to build the right
Speaker 2: customer experiences, and that could be big geographic markets for
Speaker 2: companies like ours and lots of other technology companies, where
Speaker 2: I think it would be a shame to limit them
Speaker 2: and to limit the companies.
Speaker 1: The AI diffusion rules that was brought in very swiftly
Speaker 1: by the Biden administration all of this is in the
Speaker 1: context of US versus China and not wanting to get
Speaker 1: the most sophisticated equipment and chip and technology into China.
Speaker 1: What rate for us for a moment the administration and
Speaker 1: whether it's been positive or negative for your business when
Speaker 1: it comes to China Dominimus, for example, the fact that
Speaker 1: Chinese competitors, if we call them that, Shean and the
Speaker 1: like it can have to pay more to get goods
Speaker 1: into the country. Does that help or hinder you?
Speaker 2: Well, you know, I would say, you know, on Deminimus specifically,
Speaker 2: you know, we have a certain number of items that
Speaker 2: are shipped in that way as well, for things like Hall,
Speaker 2: which is our new low price offering. We maybe have
Speaker 2: less of it than some other companies like the ones
Speaker 2: that you mentioned, but I think it's early in this administration.
Speaker 2: But what I would say is that it is encouraging
Speaker 2: to us that we have an administry that wants to
Speaker 2: hear from business. I would say that, you know, we've
Speaker 2: been a business through six administrations. Every single one of
Speaker 2: them are primary for focuses to take care of customers.
Speaker 2: But we try to build a productive relationship with the
Speaker 2: administration because we want to help the country, and I
Speaker 2: would say that some administrations are more receptive to it
Speaker 2: than others. But this administration cares about what business thinks.
Speaker 2: And I've always been surprised that it isn't obvious that
Speaker 2: the best economic results for a country are going to
Speaker 2: be when the public and the private sector collaborate. And
Speaker 2: you know, I don't expect the government to koutout to
Speaker 2: what companies want, but they should get their feedback and
Speaker 2: their input because they're going to make policies better together
Speaker 2: if they collaborate. And I'm encouraged early on that this
Speaker 2: administration wants to talk to businesses.
Speaker 1: Are you taking calls possily?
Speaker 2: You know, I take calls. We talked to you know,
Speaker 2: the same thing with all the administrations. We talk to
Speaker 2: people in the administration. We share what's working for us,
Speaker 2: what's not working for us, concerns that we have. As
Speaker 2: I said, some administrations care more about our feedback than others.
Speaker 1: Has Trump can about yours?
Speaker 2: Have you spoken to I have spoken to the President. Look,
Speaker 2: as I said, this administration has been pretty busy the
Speaker 2: first month, and but I am encouraged that they are
Speaker 2: having conversations with businesses and they do care about our
Speaker 2: feedback and we'll see what happens. But I you know,
Speaker 2: it starts with a dialogue. You have to have a
Speaker 2: dialogue to have any kind of relationship, and.
Speaker 1: They care about AI infrastructure. Just take stargate. Are we
Speaker 1: going to hear more from you on how much you're
Speaker 1: investing here in the United States on the AI infrastructure
Speaker 1: build out as well?
Speaker 2: Well, you know, as we talked about earlier, we said
Speaker 2: it was you know, directionally right in terms of the
Speaker 2: run rate on our capex. But you know, we're spending
Speaker 2: a lot on AI infrastructure, and the lion's share of
Speaker 2: it is not just on AI but also in this
Speaker 2: country in the US. We spend elsewhere because we have
Speaker 2: a global business. We have customers everywhere. We have customers,
Speaker 2: you know, a couple hundred countries. But we have a
Speaker 2: pretty substantial investment that I don't expect to attenuate soon.
Speaker 1: Only we could get a number. I'm interested in something
Speaker 1: that perhaps is going to feel a more sensitive topic,
Speaker 1: and it comes around perhaps some words that were missing
Speaker 1: in your annual report this year, which we're diversity and inclusion.
Speaker 1: I put this in the context of the administration as
Speaker 1: it stands, because I know that Amazon strives to be
Speaker 1: the Earth's best employer. And I'm just wondering how your
Speaker 1: employees react to perhaps the lack of certain words now involved,
Speaker 1: and whether or not programs might be forced to change
Speaker 1: or not.
Speaker 2: Yeah, well, what I would tell you just at a
Speaker 2: high level, if you serve as many customers as we do,
Speaker 2: in as many diverse groups as we do, and we
Speaker 2: intend to moving forward, you have to have a diverse
Speaker 2: team to be able to build products that work for everybody.
Speaker 2: And that has always been our intention to continues to
Speaker 2: be our intention. I think that you know, there were
Speaker 2: so many programs that we launched and other companies launched
Speaker 2: in the pandemic, and as you probably have seen over
Speaker 2: the last three years, we've gone through very thoroughly every
Speaker 2: single one of our business areas, and the programs that
Speaker 2: we had conviction about we doubled down on, and the
Speaker 2: programs that we don't have conviction about, we streamlined and
Speaker 2: we stopped doing. And so we did the same thing
Speaker 2: and looking at all of our programs on diversity, and
Speaker 2: you know, we have some programs that we have doubled
Speaker 2: down on. A good example is our Career Choice inside
Speaker 2: our Fulfillment Network, our Fulfillment Center. Teammates are able to
Speaker 2: get an advanced education for free on us to advance
Speaker 2: their career and their own development. And that has been very,
Speaker 2: very successful and very meaningful, and so we doubled down
Speaker 2: our program like that. There are other programs that really
Speaker 2: just haven't been that successful and haven't moved the needle much,
Speaker 2: and those we just moved away from. But we have
Speaker 2: first group. We're trying to continue to build out a
Speaker 2: diverse group and that won't.
Speaker 1: Change and you can't. You can still use that word ultimately,
Speaker 1: you're not having to reframe it.
Speaker 2: That is. I mean, look, you can call lots of people,
Speaker 2: call lots of different things, but we have a giant
Speaker 2: customer base of every imaginable group of people where we
Speaker 2: want builders who can build for them.
Speaker 1: Culture is key. Yeah, and you just talked about how
Speaker 1: you're doing more is less. It's always a focus on frugality.
Speaker 1: That's in your very principles. That's something you've been doing
Speaker 1: at the employee base as well. You wrote out made
Speaker 1: it very clear that they were going to be reducing layers.
Speaker 2: How is that going, Yeah, it's gone. Well. You know,
Speaker 2: I look, if you have a company where the culture
Speaker 2: is an important ingredient in your success, which has absolutely
Speaker 2: been true for Amazon. It's not your birth rate to
Speaker 2: keep having a strong culture, you know, especially as you
Speaker 2: grow the number of people, the number of businesses you're in,
Speaker 2: the geographies that you're in, and so you have to
Speaker 2: work at it all the time. And for us, you know,
Speaker 2: there are two areas when we looked at it as
Speaker 2: a leadership team last year that we wanted to strengthen.
Speaker 2: One was we have always hired really strong owners, smart ambitious,
Speaker 2: strong owners who get to own the allian's share of
Speaker 2: In this case, I would say, you know ninety plus
Speaker 2: percent of the decisions, and they you know, as you
Speaker 2: add a lot of people, you end up with a
Speaker 2: lot of middle managers, and those middle managers, all well intended,
Speaker 2: want to put their fingerprint on everything. So you end
Speaker 2: up with these people being in the pre meeting for
Speaker 2: the pre meeting, for the pre meeting for the decision meeting,
Speaker 2: and not always making recommendations and owning things the way
Speaker 2: we want that type of ownership. So we took a
Speaker 2: goal collectively to increase the ratio of individual contributors to
Speaker 2: managers by over fifteen percent as a company by the
Speaker 2: end of this quarter, we've made very good progress in
Speaker 2: that we've beat that already and it's going to allow
Speaker 2: us for the people that are doing the work, they're
Speaker 2: going to have more ownership and they're going to be
Speaker 2: able to move more QUI And then I think the
Speaker 2: other thing we saw was that if you're a culture
Speaker 2: that invents a lot and collaborates a lot like we do,
Speaker 2: if you don't have people in the office together doing
Speaker 2: that invention, it's just meaningfully worse. And you know, you
Speaker 2: don't invent the same way, you don't collaborate the same way,
Speaker 2: you don't connect with each other the same way, you
Speaker 2: don't learn the culture the same way. And so having
Speaker 2: people back in the office together more frequently, we felt
Speaker 2: very strong. We bet it's going to be better for
Speaker 2: customers in the business.
Speaker 1: Let's talk about that invention and that collaboration. We've got
Speaker 1: a new quantum chip us A lot love the name.
Speaker 1: What does that mean for you to have this more
Speaker 1: efficient chip at this exact moment. Will we start seeing
Speaker 1: it be practically useful soon?
Speaker 2: Welltum compute. Quantum computing is very high potential. It has
Speaker 2: the chance to solve some very computationally intense problems, and
Speaker 2: I still think it's realistically a few years away from
Speaker 2: having a real shot at solving those problems. But you
Speaker 2: have to solve a bunch of these challenges that relate
Speaker 2: to quantum computing along the way, and one of them
Speaker 2: really is around error correction on the CUBIS, and that's
Speaker 2: what Osla does. It's a very unique inventive way to
Speaker 2: do error correction on the CUBIS that makes a meaningful difference,
Speaker 2: and we're excited about that milestone. You can't get to
Speaker 2: something that has real impact unless you get those milestones
Speaker 2: done along the way, and you invent along the way,
Speaker 2: and it's just another example of invention.
Speaker 1: I feel the learning of how generative AI suddenly became
Speaker 1: not just in the business parlay, but suddenly everyone was
Speaker 1: discussing it. I think people are aware quantum could do
Speaker 1: the same thing. So when you hear people debating between
Speaker 1: two decades or five years, where do you sit on
Speaker 1: the grounder scope of that?
Speaker 2: Gosh, you know, I don't know for sure. You know,
Speaker 2: I would say I'm hopeful that it's more in the
Speaker 2: five ish year range than it is the twenty year range.
Speaker 2: You know, all these things that are successful are seven
Speaker 2: ten twenty year overnight successes. You know, it wasn't like
Speaker 2: you know, if you look at gender of AI, it's
Speaker 2: just kind of another evolution of AI. But we've been
Speaker 2: working on AI for fifty some odd years, I mean,
Speaker 2: and it's just boom, it happened, and it really shocked
Speaker 2: us when it actually was more accessible and worked. And
Speaker 2: I think the same thing could happen with quantum computing,
Speaker 2: which is you know, takes a long time, takes a
Speaker 2: long time, takes a long and then all of a
Speaker 2: sudden it's functional and solves problems that you couldn't solve
Speaker 2: easily or cost effectively before. And it just feels like
Speaker 2: it happened overnight. But quantum computing we've been working on
Speaker 2: now for ten plus years.
Speaker 1: And then the euphoria comes and then people try to
Speaker 1: make head or tail of how long that EUFORIA lasts.
Speaker 1: Going back to the investment that you make, and particularly
Speaker 1: in generative AI, do you think it's going to be
Speaker 1: peak here for generative AI in terms of that investment
Speaker 1: that Amazon makes, I don't know.
Speaker 2: You know, it's funny, I have this feeling that you're
Speaker 2: going to end up with some people that feel disillusioned
Speaker 2: about gender of AI because the investment or you getting
Speaker 2: the commensurate return. It's still very early. So many companies
Speaker 2: that are really doing pilots right now their general of
Speaker 2: AI applications and you read see a little bit of it.
Speaker 2: But I think that the smart companies are going to
Speaker 2: figure out which are the initiatives that can really change
Speaker 2: their customer experience and their businesses and keep investing in
Speaker 2: general AI, and the slower companies are going to wait
Speaker 2: to see if it's safe to go outside, and they'll
Speaker 2: be behind by two or three years, maybe more because
Speaker 2: the reality is even more soll than software development, General
Speaker 2: of AI is very iterative. It's not on software development
Speaker 2: you can get on a whiteboard with a team of
Speaker 2: architects and design something and maybe it doesn't work exactly
Speaker 2: as you design it, but largely you know, whereas in
Speaker 2: general of AI, the models they get better at kind
Speaker 2: of disproportionate rates. Sometimes you know, scaling low.
Speaker 1: Have we've got a new scaling laws.
Speaker 2: I mean, I think that a lot of times when
Speaker 2: you're building models and the model gets so much better
Speaker 2: and you talk to the scientists and the team, they
Speaker 2: just can't believe how much better it got because the
Speaker 2: model is learning itself. And so I think that if
Speaker 2: you actually aren't investing in general AI, you're going to
Speaker 2: be behind by even the amount of time that you waited,
Speaker 2: because there are so many lessons you get from iterating
Speaker 2: and building applications.
Speaker 1: Today, and you want to be the supermarket of AI
Speaker 1: feels like agnostic to the models, as it is with
Speaker 1: Amazon alexaplus.
Speaker 2: Well, you know, look, the truth is what we care
Speaker 2: most about in all our businesses, but as it relates
Speaker 2: to aws and AI, we want our customers to be
Speaker 2: able to change their customer experiences and improve their businesses
Speaker 2: so they can last over a long period time successfully.
Speaker 2: And if we do right by our customers and take
Speaker 2: the long term approach we do, and they're able to
Speaker 2: run their applications successfully on top of our technology infrastructure services,
Speaker 2: then they're successful and we ride along with them. And
Speaker 2: so you know, we in all these areas, we have
Speaker 2: services we build ourselves. In the models area, we have
Speaker 2: Amazon Nova, which people are really excited about because it's
Speaker 2: got comparable intelligence to the leading models in the world,
Speaker 2: but it's meaningfully less expensive and lower latency. But if
Speaker 2: customers prefer to run other models. We have huge partnership
Speaker 2: with Anthropic and with Lama and Mistraw deep Seek. I mean,
Speaker 2: we have the largest collection of leading foundation models in
Speaker 2: the world, and if customers are having success with those,
Speaker 2: then we're happy. And the truth is, if you build
Speaker 2: a lot of general of AI applications, people don't realize this.
Speaker 2: You use multiple model types, often in the same application.
Speaker 2: Even Alexa Plus, as we talked about, uses multiple foundation models,
Speaker 2: and so we want people to use the right model
Speaker 2: for their applications, and then we make it easy for
Speaker 2: them to switch between them and run it easily and
Speaker 2: successfully in AWS.
Speaker 1: Andy Jesse, perfect place to leave it. Start with Alexa
Speaker 1: plus and non Alexa plus and all the generation and
Speaker 1: generative AI that comes with it. We thank you so much,
Speaker 1: thanks for having me. Andy Jesse, President and CEO of
Speaker 1: Amazon