WEBVTT - Andy Jassy’s Plan to Launch Amazon Into The AI Age 0:00:00.560 --> 0:00:04.399 Andy Jassey's plan to launch Amazon into the AI age. 0:00:05.080 --> 0:00:08.000 Jasse was once Jeff Bezos's deputy and the head of 0:00:08.039 --> 0:00:12.240 Amazon's cloud computing arm. Five years into his tenure as CEO, 0:00:12.720 --> 0:00:17.000 he's killing projects, cutting staff, pleasing Wall Street, and steering 0:00:17.040 --> 0:00:21.360 the Everything Store through its greatest challenge yet by Bradstone 0:00:21.440 --> 0:00:26.240 and Matt Day read aloud by Mark Bleidorf. Thirteen miles 0:00:26.320 --> 0:00:30.120 north of Jackson, Mississippi, passed the self storage facilities, a 0:00:30.200 --> 0:00:34.159 Nissan factory, and a Coca Cola bottling plant. Five enormous 0:00:34.240 --> 0:00:37.880 rectangular buildings rise from the state's mineral rich red clay. 0:00:38.680 --> 0:00:42.280 A few years ago, this was rolling Pine forest, earmarked 0:00:42.280 --> 0:00:45.639 for development by the local planning authority. Now it's part 0:00:45.720 --> 0:00:48.240 of a twenty five billion dollar cluster of state of 0:00:48.280 --> 0:00:51.960 the art data centers. The company behind this mammoth undertaking 0:00:52.240 --> 0:00:55.840 once popularized the act of buying stuff online and later 0:00:55.960 --> 0:00:59.480 the corporate custom of running computer applications in the cloud. 0:00:59.600 --> 0:01:04.640 Amazon on a tour of the site in March. Rich Lebron, 0:01:04.920 --> 0:01:08.360 a former US Navy captain who now runs Amazon's campaign 0:01:08.440 --> 0:01:10.559 to stand up a fleet of data centers in the state, 0:01:11.200 --> 0:01:14.240 gestures passed the wire fence that cordons off of bustling 0:01:14.319 --> 0:01:18.640 construction zone that wasn't there last week, he chuckles, pointing 0:01:18.640 --> 0:01:21.160 at one of a dozen new steel structures planned for 0:01:21.200 --> 0:01:24.680 the site, each of which costs roughly one billion dollars. 0:01:25.480 --> 0:01:28.000 Inside one of them, on the other side of steel 0:01:28.080 --> 0:01:31.040 fire doors that remind employees to leave behind their cell 0:01:31.080 --> 0:01:34.800 phones and smart watches is the reason for that massive expense. 0:01:35.360 --> 0:01:38.440 There are hundreds of black cabinets, each more than seven 0:01:38.440 --> 0:01:42.560 feet high, filled with pizza box sized trays of AI accelerators, 0:01:42.800 --> 0:01:46.520 memory chips, and batteries, all connected by color coded power 0:01:46.600 --> 0:01:50.160 and networking cables and cooled by industrial fans that expel 0:01:50.240 --> 0:01:53.880 the heat generated by quintillions of math calculations each hour. 0:01:54.440 --> 0:01:57.840 The data center was constructed for Anthropic, maker of Claud, 0:01:58.200 --> 0:02:03.080 the popular chatbot. About three thousand construction workers toil here, 0:02:03.400 --> 0:02:06.200 and they're generally in awe of the project. They're a 0:02:06.200 --> 0:02:08.520 bit fuzzier on the exact name of the guy who 0:02:08.600 --> 0:02:12.079 commissioned and financed it, though on the tour a guide 0:02:12.080 --> 0:02:16.280 refers to him as Andy Jazzy. This July will mark 0:02:16.360 --> 0:02:19.399 five years since Andy Jase took over the chief executive 0:02:19.440 --> 0:02:23.679 officer role. From Amazon's founder at the corporate offices in Seattle. 0:02:23.880 --> 0:02:26.720 The workforce has grown accustomed to his brand of rigorous 0:02:26.720 --> 0:02:29.919 oversight and ongoing exhortations to act as if they were 0:02:29.919 --> 0:02:33.280 at Jeff Bezos's startup, not a two point nine trillion 0:02:33.320 --> 0:02:37.600 dollar behemoth. He recently placed a series of staggeringly expensive 0:02:37.639 --> 0:02:41.640 bets on artificial intelligence, audacious even by the standards of 0:02:41.680 --> 0:02:46.760 Silicon Valley's ongoing trillion dollar AI bacchanalia. In February, he 0:02:46.840 --> 0:02:49.560 agreed to invest as much as fifty billion dollars in 0:02:49.680 --> 0:02:52.919 Open AI, in a deal that commits the rising startup 0:02:53.000 --> 0:02:56.400 to relying in part on Amazon's data centers and custom 0:02:56.480 --> 0:03:00.920 designed microchips. Then in April, he expanded a similar partnership 0:03:00.919 --> 0:03:05.080 with its arch rival Anthropic, a thirteen billion dollar investment 0:03:05.200 --> 0:03:08.520 with an option for an additional twenty billion dollars. To 0:03:08.639 --> 0:03:12.240 Jasse's critics that spending was the price of Amazon's late 0:03:12.360 --> 0:03:15.960 jump into the current AI wave, he wasn't bluffing, though. 0:03:16.360 --> 0:03:19.880 Jasse spooked investors by vowing to spend two hundred billion 0:03:19.960 --> 0:03:24.160 dollars this year on big ticket items, including warehouse robots, 0:03:24.360 --> 0:03:27.360 a far out effort to launch satellites into space, and 0:03:27.480 --> 0:03:31.679 in particular more AI data centers, AI chips, and networking equipment. 0:03:32.400 --> 0:03:34.880 I don't think the world has ever seen a technology 0:03:34.920 --> 0:03:37.680 get this much adoption and grow this quickly, at least 0:03:37.720 --> 0:03:42.400 in my lifetime, Jesse tells Bloomberg BusinessWeek. Jase runs the 0:03:42.480 --> 0:03:45.960 fifth largest company in the world by market value. He 0:03:46.080 --> 0:03:50.760 takes pains earnestly and often awkwardly to project an everyman image, 0:03:51.040 --> 0:03:54.680 in part by constantly advertising his lifelong passion for music 0:03:54.760 --> 0:03:57.760 and sports in the ante room to the executive suite. 0:03:57.760 --> 0:04:01.320 In Amazon's Day one headquarters. On a rainy morning in April, 0:04:01.720 --> 0:04:05.240 the Who's Tommy plays on a turntable. On the wall 0:04:05.400 --> 0:04:09.000 is a display of album covers, Ramon's Pink Floyd and 0:04:09.160 --> 0:04:14.400 baseball caps Seattle Kraken New York Giants. He also studiously 0:04:14.440 --> 0:04:19.080 strives to embody one of Amazon's sixteen leadership principles, frugality, 0:04:19.400 --> 0:04:22.600 as if to compensate for Bezos's public evolution into an 0:04:22.800 --> 0:04:26.440 icon of over indulgence. Jasse drives himself to work in 0:04:26.440 --> 0:04:29.400 a ninety eight jeep Cherokee, even though he imagines the 0:04:29.440 --> 0:04:33.479 airbags might pulverize him if they ever deployed. His favorite 0:04:33.520 --> 0:04:36.960 beer is Manny's, a Seattle microbrew and fixture at the 0:04:36.960 --> 0:04:40.880 city's sports bars, and dives to his BusinessWeek photo shoot. 0:04:41.000 --> 0:04:44.000 He wears what he calls his eight minute Blazer, which 0:04:44.000 --> 0:04:46.200 he once bought in a hurry for a customer meeting. 0:04:46.839 --> 0:04:52.359 He's customer obsessed, product obsessed, and frankly Amazon obsessed, says 0:04:52.360 --> 0:04:56.600 his Harvard classmate Gina Raimondo, the former US Secretary of Commerce. 0:04:57.120 --> 0:05:00.080 It's really the only place he's ever worked the The 0:05:00.120 --> 0:05:03.479 company is much different from the online bookseller Jasse joined 0:05:03.520 --> 0:05:07.560 in nineteen ninety seven. Amazon today is a corporate urducan 0:05:08.000 --> 0:05:11.480 an advertising, business, and logistics company stuffed inside an e 0:05:11.520 --> 0:05:15.880 commerce marketplace, trust to a cloud computing powerhouse, and garnished 0:05:15.880 --> 0:05:21.160 with Alexa, wholefoods market and Prime video. The behemoth infuriates critics, 0:05:21.240 --> 0:05:24.479 who lambased its rough treatment of drivers and warehouse workers 0:05:24.760 --> 0:05:28.000 and its willingness to bully rivals. On the other hand, 0:05:28.360 --> 0:05:31.320 ordering from Amazon and seeing a cardboard box sitting on 0:05:31.360 --> 0:05:33.680 your doorstep the next day is one of the few 0:05:33.720 --> 0:05:37.400 reliable luxuries of modern life, made possible only because of 0:05:37.400 --> 0:05:41.320 the company's ruthless ability to root out inefficiencies, adopt cutting 0:05:41.400 --> 0:05:44.800 edge robotics, and hide all the messiness from our delicate eyes. 0:05:45.760 --> 0:05:48.680 Jasse took over in mid twenty twenty one and had 0:05:48.680 --> 0:05:51.000 to correct course from some of the excesses of the 0:05:51.080 --> 0:05:54.479 late Bezos era, including a spurt of over hiring to 0:05:54.520 --> 0:05:58.760 meet pandemic demand. He laid off roughly sixty thousand corporate 0:05:58.800 --> 0:06:03.600 personnel employees back to the office and shuttered dozens of projects, 0:06:03.800 --> 0:06:07.960 such as the cashierless go stores, Amazon Fresh supermarkets, and 0:06:08.000 --> 0:06:13.160 a telehealth service. Employees grumbled, but his personal style contrasted 0:06:13.160 --> 0:06:17.320 favorably with his former bosses. He was ever present, probing, 0:06:17.400 --> 0:06:21.520 but never argumentative. Jasse for years has urged colleagues to 0:06:21.600 --> 0:06:24.920 not be afraid to ask dumb questions. He also has 0:06:24.960 --> 0:06:27.640 the agreeable habit of thanking everyone at the beginning and 0:06:27.760 --> 0:06:31.400 end of meetings and sending holiday cards to his senior execs. 0:06:32.080 --> 0:06:35.000 Friends vow that it's all authentic and not at all 0:06:35.120 --> 0:06:38.920 humility theater for a leery public that's become profoundly skeptical 0:06:38.960 --> 0:06:44.360 of technology overlords. Then came the age of generative AI, 0:06:44.520 --> 0:06:48.560 inaugurated by Open AI's chat GPT in late twenty twenty two, 0:06:49.040 --> 0:06:52.640 which posed perhaps the first existential challenge to Jasse's own 0:06:52.720 --> 0:06:58.240 baby and Amazon's profit engine, Amazon Web Services. With AWS, 0:06:58.640 --> 0:07:02.000 Amazon invented cloud computing and went on to build a 0:07:02.000 --> 0:07:05.200 client list that included the biggest names in corporate America. 0:07:05.680 --> 0:07:09.000 It remains the market leader, though Microsoft and Alphabet have 0:07:09.080 --> 0:07:12.880 collectively booked six hundred billion dollars more in future business 0:07:12.920 --> 0:07:17.000 than Amazon. Since chat GPT came on the scene. Would 0:07:17.000 --> 0:07:20.680 companies and governments move their data off Amazon servers to 0:07:20.760 --> 0:07:24.920 access the newest large language models. Would shoppers, for that matter, 0:07:25.160 --> 0:07:28.480 start browsing and buying with knowledgeable chatbots such as chat 0:07:28.480 --> 0:07:32.520 GBT and Google's Gemini instead of endearing the ad riddled 0:07:32.560 --> 0:07:36.720 search results on Amazon dot Com. The answers to those questions, 0:07:36.840 --> 0:07:40.000 and how Jasse navigates the AI era will matter more 0:07:40.040 --> 0:07:43.480 than anything else in determining whether Amazon continues to thrive 0:07:43.560 --> 0:07:46.640 in its fourth decade and how posterity comes to view 0:07:46.720 --> 0:07:51.960 Bezos's successor. Some of Jasse's moves have seemed contrarian. While 0:07:52.000 --> 0:07:56.200 the world swooned over CHATGPT, Amazon executives told anyone who 0:07:56.200 --> 0:07:58.560 would listen that the market would be bigger than any 0:07:58.600 --> 0:08:03.440 one chatbot. Jase cozied up to Anthropic, getting Amazon corporate 0:08:03.480 --> 0:08:06.840 customers access to Claude, and buying time for Amazon to 0:08:06.880 --> 0:08:10.440 develop its own alternative. He decided that Amazon should be 0:08:10.520 --> 0:08:15.400 of all crazy things, the Amazon of AI. Then assured investors, employees, 0:08:15.440 --> 0:08:18.360 and the public that resisting the coming changes wrought by 0:08:18.400 --> 0:08:22.000 AI would be feudile. I can understand how when there's 0:08:22.000 --> 0:08:24.720 the potential for this much change it can make some 0:08:24.800 --> 0:08:27.440 people nervous. I just happen to think it's going to 0:08:27.480 --> 0:08:30.600 make so many things better. He says. You can choose 0:08:30.600 --> 0:08:33.839 to howl at the wind, but AI is not going away. 0:08:35.520 --> 0:08:39.160 Jase never intended to spend his life in the Pacific Northwest. 0:08:39.600 --> 0:08:42.000 He grew up outside New York City in a well 0:08:42.040 --> 0:08:46.200 off household with doting parents. During business school, he agreed 0:08:46.240 --> 0:08:49.520 with his Los Angeles raised girlfriend and now wife, Elana, 0:08:50.040 --> 0:08:53.280 via contract scribbled on a bar napkin, of course, to 0:08:53.320 --> 0:08:56.160 spend a few years out west before returning to New York. 0:08:56.800 --> 0:08:59.840 Jase applied for jobs over the summer and enjoys telling 0:08:59.840 --> 0:09:02.600 the story of how he ended up interviewing at Walt Disney. 0:09:03.200 --> 0:09:06.880 Asked to name an incredibly successful product without picking Nike 0:09:07.080 --> 0:09:10.920 or other obvious choices, Jasse blurted out Beavis and butt Heead, 0:09:11.400 --> 0:09:16.280 touting the cartoons creative merchandising. Jasse didn't get the job. 0:09:16.720 --> 0:09:20.320 Telling the story is perhaps more humility theater, but to 0:09:20.320 --> 0:09:23.280 fulfill the contract with Elana, he worked for a digital 0:09:23.320 --> 0:09:26.960 stock photography company one summer in Seattle and loved the city. 0:09:27.520 --> 0:09:30.680 Approaching graduation, he applied to a few other West Coast 0:09:30.720 --> 0:09:34.320 companies until an online bookseller flying high in the first 0:09:34.360 --> 0:09:37.240 dot com boom, plucked his resume out of a stack. 0:09:37.960 --> 0:09:42.000 Amazon was all hands on deck, with employees spending weeks 0:09:42.040 --> 0:09:46.480 over the holidays in warehouses packaging books for customers. Colleagues 0:09:46.520 --> 0:09:50.400 remember Jasse running Amazon's first eight person marketing team and 0:09:50.440 --> 0:09:54.720 then its fledgling CD selling business, parroting bezos maxims and 0:09:54.760 --> 0:09:57.080 wearing his dress shirts rolled up at the sleeves above 0:09:57.080 --> 0:10:01.360 the elbows, working for Bezos back then with tough, Why 0:10:01.360 --> 0:10:03.440 should I listen to anything else you have to say 0:10:03.520 --> 0:10:06.120 the rest of this time? He once asked Jasse in 0:10:06.160 --> 0:10:09.600 a packed meeting after identifying some incorrect numbers in a 0:10:09.640 --> 0:10:14.760 slide presentation, Jasse persevered and impressed the boss, who selected 0:10:14.840 --> 0:10:18.240 him as his first technical advisor or shadow, a job 0:10:18.240 --> 0:10:21.160 that consisted of trailing the CEO to meetings and then 0:10:21.200 --> 0:10:25.199 huddling with him each week to consider various opportunities. During 0:10:25.240 --> 0:10:30.160 that time, Bezos and Jasse conceived Amazon Web Services partly 0:10:30.200 --> 0:10:33.480 to relieve it bottlenecks at the company by building heavily 0:10:33.520 --> 0:10:37.640 automated self service computing tools, and in two thousand and six, 0:10:38.000 --> 0:10:41.560 Jasse split off to run it. One can see why 0:10:41.760 --> 0:10:44.800 fifteen years later, Bezos came to view Jasse as his 0:10:44.920 --> 0:10:50.360 natural successor. AWS attracted waves of startups like Airbnb, Reddit, 0:10:50.400 --> 0:10:54.440 and Dropbox, then larger enterprises such as Netflix into it, 0:10:54.520 --> 0:10:58.760 and the US government including the CIA. In twenty fifteen, 0:10:59.160 --> 0:11:02.439 Jasse and Jane Hamilton, a top technical exec at the company, 0:11:02.720 --> 0:11:06.679 spearheaded the acquisition of Napurna Labs to kickstart the process 0:11:06.720 --> 0:11:09.640 of supplanting the pricey hardware in its data centers made 0:11:09.679 --> 0:11:14.320 by Intel and other companies. By twenty sixteen, AWS was 0:11:14.320 --> 0:11:18.000 generating twelve billion dollars in sales a year. Jeff was 0:11:18.040 --> 0:11:21.760 pretty hands off, says Peter DeSantis, a Jasse deputy who 0:11:21.800 --> 0:11:25.960 now runs Amazon's AI, chips and Quantum computing group. He 0:11:26.040 --> 0:11:29.040 audited US he poked on us, but that relationship has 0:11:29.080 --> 0:11:33.520 been fairly consistent over time. Several Amazon board members say 0:11:33.600 --> 0:11:37.080 Jasse was the clear choice, even before Bezos decided he 0:11:37.160 --> 0:11:39.760 wanted to spend more time with his boat and other 0:11:39.880 --> 0:11:43.800 endeavors like his space company Blue Origin. It was always 0:11:43.880 --> 0:11:47.600 obvious that Andy was the right person, says Wendell Weeks, 0:11:47.640 --> 0:11:50.800 CEO of Corning and a board member since twenty sixteen. 0:11:51.480 --> 0:11:54.160 You could not have a higher regard than Jeff has 0:11:54.160 --> 0:11:57.480 of Andy's builder skills, and that is the good housekeeping 0:11:57.520 --> 0:12:01.679 seal of approval. Jesse claimed improbably that he had never 0:12:01.720 --> 0:12:04.280 thought about getting promoted, and says that he took a 0:12:04.320 --> 0:12:07.400 few days to consider it. I think there was a 0:12:07.440 --> 0:12:10.560 low chance he was going to say no, says Beth Galletti, 0:12:10.840 --> 0:12:14.000 Amazon's human resources chief. But I also think that he 0:12:14.080 --> 0:12:15.880 was taking the time to make sure that when he 0:12:15.960 --> 0:12:18.640 said yes, he was ready to go do all the 0:12:18.679 --> 0:12:22.560 things that then meant the week. Jasse officially became CEO 0:12:22.720 --> 0:12:25.600 in July twenty twenty one at the Allen and Company 0:12:25.679 --> 0:12:30.240 mogulfest in Sun Valley, Idaho. Bezos worked the room, asking 0:12:30.280 --> 0:12:34.640 attendees to congratulate Jassey and support him. Since then, Bezos 0:12:34.679 --> 0:12:37.640 has been an active chairman of Amazon's board of directors. 0:12:38.080 --> 0:12:42.040 He speaks last in board meetings and pitches enthusiastic ideas 0:12:42.080 --> 0:12:46.959 about emerging technologies like humanoid robots. Amazon is my baby, 0:12:47.000 --> 0:12:49.640 and I will always be a parent, Bezos said in 0:12:49.679 --> 0:12:53.440 a statement, I will never ever stop worrying about having 0:12:53.559 --> 0:12:56.520 love for having heart for Amazon, and I work on 0:12:56.600 --> 0:12:58.880 it every day, and one of my jobs is to 0:12:58.920 --> 0:13:01.600 make sure that Andy and his leadership team are successful. 0:13:02.400 --> 0:13:06.640 Bezos has also helped Amazon navigate Washington, DC, as when 0:13:06.679 --> 0:13:09.480 he took a call from the President when Amazon considered 0:13:09.480 --> 0:13:13.839 disclosing some tariff costs to shoppers. Jasse, a donor to 0:13:13.880 --> 0:13:17.640 mostly Democratic candidates and Causes, says with equanimity that he 0:13:17.760 --> 0:13:20.920 too has relationships with the White House and that I 0:13:21.040 --> 0:13:23.520 find that a lot of times people actually all want 0:13:23.559 --> 0:13:26.880 the same things. Members of the board say the company 0:13:26.880 --> 0:13:29.920 puts Bezos to good use in managing a transactional and 0:13:30.000 --> 0:13:33.800 vituperative White House. He gets access to audiences that some 0:13:33.840 --> 0:13:37.480 people don't always get access to, says Brad Smith, the 0:13:37.520 --> 0:13:40.400 former CEO of into It and an Amazon board member 0:13:40.440 --> 0:13:43.960 since twenty twenty three. No one is confused that Andy's 0:13:44.000 --> 0:13:47.360 the CEO and Jeff is in there as an incredible asset. 0:13:48.559 --> 0:13:51.679 We'll be right back with Andy Jase's plan to launch 0:13:51.720 --> 0:13:59.240 Amazon into the AI age. Welcome back to Andy Jase's 0:13:59.240 --> 0:14:03.959 plan to launch Amazon into the AI age. Jase now 0:14:04.000 --> 0:14:08.280 had an unfathomably large surface area to oversee not only 0:14:08.400 --> 0:14:12.560 cloud services and chips, but also perishable groceries, films and 0:14:12.640 --> 0:14:16.319 TV shows, consumer electronics, and all the other meets in 0:14:16.360 --> 0:14:20.560 the Amazon Turducan. Although he sat on Bezos' leadership s 0:14:20.640 --> 0:14:24.120 team for years, much of the new territory felt unfamiliar, 0:14:24.640 --> 0:14:27.680 so Jasse scheduled what he called learning sessions and what 0:14:27.800 --> 0:14:32.360 colleagues euphimistically dubbed inspections, deep dives into different parts of 0:14:32.360 --> 0:14:36.680 the business, with sometimes combative results. During his first year 0:14:36.720 --> 0:14:41.200 as CEO, Jasse walked through Amazon warehouses and transportation hubs 0:14:41.400 --> 0:14:45.680 around the country. He examined Amazon's massive HR group and 0:14:45.760 --> 0:14:48.720 the highly automated tools it uses to manage one point 0:14:48.760 --> 0:14:52.040 five million employees. He came into the office a few 0:14:52.120 --> 0:14:56.080 days after Christmas one year to record sixteen videos extolling 0:14:56.360 --> 0:14:59.400 seemingly off the cuff and wearing a close cousin to 0:14:59.400 --> 0:15:03.640 the eight minute Blazer each of Amazon's leadership principles. He 0:15:03.720 --> 0:15:07.040 traveled to LA to visit Amazon's Hollywood arm and called 0:15:07.040 --> 0:15:10.119 its leaders back to headquarters to ask broad but discussion 0:15:10.160 --> 0:15:14.320 provoking questions about how commissioning TV shows and films helped 0:15:14.360 --> 0:15:18.840 Amazon's overall business. The deepest dive was reserved for Amazon's 0:15:18.880 --> 0:15:22.480 original business of e commerce, and its decades long pushed 0:15:22.560 --> 0:15:25.800 to speed up delivery by building warehouses ever closer to 0:15:25.880 --> 0:15:30.120 customers and obsessing maniacally over the cost of operating them. 0:15:30.360 --> 0:15:34.200 Not everyone took his prodding well. Over that first year, 0:15:34.400 --> 0:15:38.920 at least a half dozen senior execs left Amazon. Dave Clark, 0:15:39.040 --> 0:15:42.440 who oversaw the rapid expansion of Amazon's logistics network and 0:15:42.560 --> 0:15:45.640 led the retail business, was among the most high profile 0:15:45.720 --> 0:15:49.000 departures after Jasse tunneled into a debate over the cost 0:15:49.040 --> 0:15:53.440 to deliver products from warehouses to customer doorsteps from mid 0:15:53.480 --> 0:15:57.160 twenty two onwards. I think the organization actually took the 0:15:57.240 --> 0:16:00.680 inspections quite well, says Udiit Madan, who sits in the 0:16:00.680 --> 0:16:04.720 logistic czar chair once held by Clark. Madan adds that 0:16:04.840 --> 0:16:08.600 Jasse's probing led his group to reconceive Amazon's US warehouse 0:16:08.640 --> 0:16:12.480 and transportation network as a series of separate regions rather 0:16:12.520 --> 0:16:15.920 than a single hole, which moved products closer to customers 0:16:15.920 --> 0:16:19.880 and accelerated delivery times. The teams had gotten quite comfortable 0:16:19.880 --> 0:16:23.760 with linear progress. Jasse's questions forced us to go back 0:16:23.760 --> 0:16:27.840 and spend a few weeks thinking, he says. Jase concedes 0:16:27.880 --> 0:16:30.760 that the friction surprised him. All the people that I 0:16:30.880 --> 0:16:33.520 was going to manage in my new job were peers 0:16:33.560 --> 0:16:36.440 for a long time, and I had good relationships with them, 0:16:36.520 --> 0:16:41.840 he says. After becoming CEO, every relationship reset. Some of 0:16:41.880 --> 0:16:44.320 them reset really quickly, some of them took a bit 0:16:44.360 --> 0:16:47.680 longer to reset, and some never reset. And the ones 0:16:47.720 --> 0:16:51.920 that don't reset, both parties have to move on. Jasse 0:16:52.120 --> 0:16:55.720 also declared war on the bureaucracy that grew as Amazon's 0:16:55.760 --> 0:16:59.320 corporate staff swelled to more than three hundred thousand. He 0:16:59.360 --> 0:17:02.520 asked teams to increase the ratio of individual contributors to 0:17:02.600 --> 0:17:06.359 managers by fifteen percent, decreed that each manager had to 0:17:06.400 --> 0:17:10.439 oversee six people or more, and introduced a bureaucracy mailbox 0:17:10.480 --> 0:17:15.360 to let workers complain about sclerotic processes. Many employees privately 0:17:15.400 --> 0:17:18.480 confide that this fight hasn't yet been won, and that 0:17:18.560 --> 0:17:22.000 the mailbox just forwards to the whistleblower's most senior boss. 0:17:22.880 --> 0:17:27.439 Members of Amazon's board, though seemed satisfied. Andy inherited a 0:17:27.440 --> 0:17:30.040 frigging mess, and it was a mess that we all 0:17:30.119 --> 0:17:33.760 were part of, including Jeff says Jamie Gorlik, a former 0:17:33.880 --> 0:17:37.000 US Deputy Attorney General and an Amazon board member since 0:17:37.000 --> 0:17:40.240 twenty twelve. At the end of COVID, we had more 0:17:40.280 --> 0:17:43.359 capacity than we needed. We also had a myriad of 0:17:43.400 --> 0:17:47.720 potential and actual investments. Andy was meticulous in addressing both 0:17:47.760 --> 0:17:49.920 of those and got us to the point after about 0:17:49.920 --> 0:17:53.919 two years where we knew he'd righted the ship. But 0:17:54.040 --> 0:17:56.000 for a company on track to become the first to 0:17:56.080 --> 0:18:00.080 hit one trillion dollars in revenue, slashing bureaucracy and shutting 0:18:00.119 --> 0:18:02.879 down moonshots was not going to deliver a new wave 0:18:02.920 --> 0:18:07.119 of reliable growth. So while Jasse canceled some projects, he 0:18:07.200 --> 0:18:11.760 sprinkled investments elsewhere, like the autonomous Zeke's robotaxis that offer 0:18:11.840 --> 0:18:14.879 rides to the public in San Francisco and Las Vegas, 0:18:14.920 --> 0:18:18.679 a set of healthcare initiatives branded Amazon Health Services, and 0:18:18.800 --> 0:18:23.520 Amazon's Leo satellite effort. The brainchild of former Starlink engineers 0:18:23.560 --> 0:18:27.359 who left SpaceX and joined Amazon in twenty eighteen. LEO 0:18:27.520 --> 0:18:30.840 is an attempt to offer satellite internet access anywhere on Earth. 0:18:31.359 --> 0:18:35.480 It has faced delays as rocket bakers, including Bezos' Blue Origin, 0:18:35.760 --> 0:18:38.879 struggled to launch on time and deliver payloads to the 0:18:38.960 --> 0:18:43.159 right orbit. Nevertheless, in April, Jasse bolstered the project with 0:18:43.240 --> 0:18:47.040 his biggest acquisition yet, an eleven point six billion dollars 0:18:47.119 --> 0:18:50.640 deal to buy global Star, a satellite outfit best known 0:18:50.680 --> 0:18:55.560 for providing emergency connectivity to iPhone users. About three hundred 0:18:55.640 --> 0:18:59.119 LEO satellites are in low Earth orbit, providing access to 0:18:59.200 --> 0:19:03.960 beta customers. Amazon's satellite plant in Kirkland, Washington is a 0:19:04.000 --> 0:19:08.000 testament to Jasse's even grander ambitions. In a former video 0:19:08.040 --> 0:19:11.639 game hardware factory tucked behind a car dealership, hundreds of 0:19:11.720 --> 0:19:16.560 engineers wearing electrostatic discharge smocks and safety goggles turn out 0:19:16.680 --> 0:19:21.119 multiple satellites a day. Individual components such as flight computers, 0:19:21.200 --> 0:19:24.960 solar panels, and radio arrays are shaken, baked, and frozen 0:19:25.080 --> 0:19:28.760 in large testing chambers to simulate the conditions of spaceflight. 0:19:29.359 --> 0:19:33.040 Completed satellites are turned on for testing, then put to sleep, 0:19:33.359 --> 0:19:36.359 laid on a custom steel palette with shock absorbers, and 0:19:36.400 --> 0:19:39.080 shipped by truck to the Kennedy Space Center in Florida, 0:19:39.400 --> 0:19:41.800 where they'll wait to be loaded onto a rocket to 0:19:41.840 --> 0:19:46.280 extend the inescapable influence of Amazon and Anti Jassey into 0:19:46.320 --> 0:19:50.840 outer space. But Jasse's biggest bet by dollar value and 0:19:50.960 --> 0:19:52.879 the share of the eight or so meetings he's in 0:19:52.920 --> 0:19:57.240 every day, is AI. Even though Bezos was pushing machine 0:19:57.280 --> 0:20:00.640 learning tools on employees over the last ten years of tenure, 0:20:01.000 --> 0:20:04.480 Amazon was late to the AI frenzy. It never developed 0:20:04.480 --> 0:20:07.600 as large a fundamental research group as rivals like Google 0:20:07.960 --> 0:20:11.919 and missed obvious hints about what was coming. Anthropic, founded 0:20:11.960 --> 0:20:16.240 in early twenty twenty one, originally relied exclusively on AWS 0:20:16.640 --> 0:20:19.720 and turned through so much processing power that some inside 0:20:19.760 --> 0:20:23.320 Amazon wanted their company to invest in the San Francisco startup. 0:20:23.920 --> 0:20:27.199 Executives weren't convinced there was a real business model and 0:20:27.440 --> 0:20:31.679 passed on Anthropics early funding rounds, but Google invested in 0:20:31.720 --> 0:20:35.440 early twenty twenty three and shrewdly wove its homegrown Gemini 0:20:35.520 --> 0:20:39.840 model across its services. Microsoft meanwhile back to open AI 0:20:41.000 --> 0:20:44.879 after chat GPT and Claude took off. Amazon rushed to 0:20:44.920 --> 0:20:48.520 catch up. Its first LLM powered products were rough around 0:20:48.560 --> 0:20:52.160 the edges, and managers across Amazon told employees to dig 0:20:52.200 --> 0:20:56.320 in for a long and difficult engineering effort. Alexa, which 0:20:56.440 --> 0:20:59.800 Jassey and colleagues disconcertingly insist on referring to as she 0:21:00.040 --> 0:21:03.800 d needed a total overhaul to compete with new chatbots 0:21:04.040 --> 0:21:08.680 and an inevitable flood of AI infused devices. Jasse engaged 0:21:08.760 --> 0:21:13.359 personally in the effort, rewriting its PRFAQ, the document framed 0:21:13.359 --> 0:21:15.439 as a press release that's crafted at the start of 0:21:15.480 --> 0:21:18.960 every project inside the company and firing off bug reports 0:21:19.000 --> 0:21:22.800 on early versions of the software. Engineers in Boston and 0:21:22.880 --> 0:21:26.160 Seattle recall working eighty hours a week for two years 0:21:26.160 --> 0:21:29.400 to make Alexa more conversational and to surpass what they 0:21:29.440 --> 0:21:33.320 described as an internal target of ninety seven percent correct answers. 0:21:34.119 --> 0:21:37.239 Alexa Plus, as the company calls it, was unveiled at 0:21:37.240 --> 0:21:40.639 a Manhattan press conference in February twenty twenty five, with 0:21:40.800 --> 0:21:44.400 Jase's parents sitting in the front row. Over the next year, 0:21:44.640 --> 0:21:48.720 the refurbished assistant was automatically downloaded onto tens of millions 0:21:48.760 --> 0:21:51.600 of the Echo speakers out in the world, giving them 0:21:51.640 --> 0:21:57.800 an instant brain boost it uugh. She now banters with users, 0:21:58.000 --> 0:22:01.960 sometimes gradingly, and Kenris spond to complex commands by turning 0:22:01.960 --> 0:22:05.280 on the lights, hailing an uber, and making a restaurant reservation. 0:22:06.119 --> 0:22:09.480 Jasse asserts that users are talking to Alexa plus twice 0:22:09.520 --> 0:22:11.840 as much as they did with the original, and says 0:22:12.119 --> 0:22:14.639 it's still early with respect to how good Alexa is 0:22:14.680 --> 0:22:18.320 going to be over time. Both Alexa and Rufus, a 0:22:18.359 --> 0:22:22.480 conversational chatbot that helps shoppers find and compare products on Amazon, 0:22:22.800 --> 0:22:25.440 are powered in part by a homegrown suite of AI 0:22:25.560 --> 0:22:29.159 models called Nova, but they're not widely regarded as a 0:22:29.200 --> 0:22:33.760 credible competitor to the most capable llms, so Jasse opened 0:22:33.760 --> 0:22:37.760 his checkbook. He invested in Anthropic in September twenty twenty three, 0:22:38.119 --> 0:22:41.679 seven months after Google's own stake became public, and then 0:22:41.720 --> 0:22:44.720 this spring in open Ai, which this year made versions 0:22:44.760 --> 0:22:47.200 of its models available as an option on the dinner 0:22:47.240 --> 0:22:52.040 menu of AI tools on aws's Bedrock service. Both companies 0:22:52.040 --> 0:22:55.159 have promised to use chips from Annapurna, cutting into the 0:22:55.200 --> 0:22:58.160 dollars the companies send to the hugely profitable chip maker. 0:22:58.240 --> 0:23:02.520 In Nvidia. Amazon claims its AI chip Traanium is more 0:23:02.680 --> 0:23:06.840 energy efficient and runs more cheaply than comparable silicon from Nvidia. 0:23:07.680 --> 0:23:11.800 On a recent podcast, Nvidia CEO Jensen Huang rejected that 0:23:11.880 --> 0:23:15.080 claim and said nobody can demonstrate to me that any 0:23:15.119 --> 0:23:18.160 single platform in the world today has a better performance. 0:23:19.280 --> 0:23:22.640 Asked whether he trusts Open Ai chief Sam Altman, who's 0:23:22.680 --> 0:23:25.600 often characterized in the press and by critics as a 0:23:25.640 --> 0:23:28.800 master strategist who tailors his message to such a degree 0:23:28.960 --> 0:23:32.480 that it can border on deception, jasse responds by saying 0:23:32.560 --> 0:23:35.200 he spoke with Altman multiple times a week for four 0:23:35.200 --> 0:23:38.359 months straight. We were pretty open with one another about 0:23:38.359 --> 0:23:41.800 what was important to us in building a partnership. He says, 0:23:41.840 --> 0:23:44.880 in my own interactions with Sam, I do trust him. 0:23:45.119 --> 0:23:48.280 The deals have made AWS a safe space for companies 0:23:48.320 --> 0:23:51.880 looking to enjoy the AI ferry dust, as evidenced by 0:23:51.880 --> 0:23:54.640 the unit's fastest sales growth in more than three years. 0:23:55.240 --> 0:23:58.679 In late April, AWS started selling a broader suite of 0:23:58.680 --> 0:24:02.439 software for office tax a bet that AI powered tools 0:24:02.480 --> 0:24:06.320 could grab customers in a market dominated by Salesforce, SAP 0:24:06.520 --> 0:24:10.680 and other companies. They're so good at creating affordable innovation, 0:24:11.160 --> 0:24:15.520 says Adina Friedman, the CEO of Nasdaq, an AWS customer 0:24:15.560 --> 0:24:19.040 since two thousand and eight. Jase's strategy is straight from 0:24:19.040 --> 0:24:23.720 the book of Bezos. Offer vast selection, undercut fat margin rivals, 0:24:23.920 --> 0:24:27.399 and eliminate any reason for customers to even think about leaving. 0:24:28.320 --> 0:24:32.240 That success has put AWS once the insurgent pirate ship 0:24:32.280 --> 0:24:35.560 that tore through the established giants of corporate computing, in 0:24:35.600 --> 0:24:39.280 a strange new position, an incumbent defending its turf in 0:24:39.320 --> 0:24:42.760 an age of disruption. Most companies want to run their 0:24:42.800 --> 0:24:45.520 AI where the rest of their data and applications are, 0:24:45.760 --> 0:24:48.480 Jase says, and a lot more of that lives in 0:24:48.520 --> 0:24:53.119 AWS than anywhere else. Every fall for the past few years, 0:24:53.280 --> 0:24:56.200 forty business leaders head to Seattle for what Jasse calls 0:24:56.240 --> 0:25:00.159 the Amazon CEO Summit, a private, day long conference to 0:25:00.200 --> 0:25:03.399 talk about technology trends and share personal tips on the 0:25:03.400 --> 0:25:07.360 grind of leading through a turbulent business environment. Execs such 0:25:07.400 --> 0:25:11.480