WEBVTT - AWS CEO Matt Garman Talks First Month on the Job

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<v Speaker 1>It's been one month since the changing of the guard

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<v Speaker 1>at the top of Amazon Web Services, with Matt Garman

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<v Speaker 1>becoming CEO, and he joins us now for an update

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<v Speaker 1>on how things are going and to lay out his

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<v Speaker 1>vision for AWS, the leader in the cloud market. Missus Garman,

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<v Speaker 1>good morning to you. Let's start with the basics. What

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<v Speaker 1>have you spent the last thirty days or so doing

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<v Speaker 1>and how quickly have you tried to implement changes that

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<v Speaker 1>you think were helpful important AWS?

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<v Speaker 2>Oh, thank you and thanks for having me this morning.

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<v Speaker 2>It's been a great first month. I've been diving into

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<v Speaker 2>various teams and understanding where all the teams are working on.

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<v Speaker 2>In particular, I'm excited about the opportunity in front of us.

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<v Speaker 2>I've spent some time sitting down with customers and understanding

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<v Speaker 2>what's important to them. Spent a bunch of time last

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<v Speaker 2>week in Silicon Valley talking to some small startups to

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<v Speaker 2>understand what's going on in the general of AI space.

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<v Speaker 2>And there's a lot of excitement about new technologies that

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<v Speaker 2>are coming and the potential for where business as go.

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<v Speaker 2>So I'm incredibly excited and looking forward to the business.

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<v Speaker 1>Now we will talk about generative AI. But your background

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<v Speaker 1>is so interesting because you've held pretty long periods of

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<v Speaker 1>both engineering and sales responsibilities in the cloud market at AWS.

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<v Speaker 1>You know, before we were talking about AI, the story

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<v Speaker 1>with cloud was really clear. There was this massive total

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<v Speaker 1>addressable market where companies all around the world had not

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<v Speaker 1>yet transition workloads and storage to the cloud. And increasingly

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<v Speaker 1>we're actually talking about on prem being back a little bit.

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<v Speaker 1>Just talks to me about your strategy for going after

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<v Speaker 1>that addressable market the basics of cloud computing.

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<v Speaker 2>Yeah, the opportunity ahead is really enormous for the business.

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<v Speaker 2>If you look out there and you actually talk to

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<v Speaker 2>most customers, the vast majority of their workloads aren't yet

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<v Speaker 2>in the cloud. Some estimates are only ten to fifteen

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<v Speaker 2>percent of workloads have actually transitioned to the cloud. And

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<v Speaker 2>actually we hear from customers that, if anything, they're looking

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<v Speaker 2>to accelerate that transition to the cloud. If you think

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<v Speaker 2>about genitive at AI or other technologies, most customers are

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<v Speaker 2>finding that it's hard to actually take real advantage of

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<v Speaker 2>some of these new technologies that are out there if

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<v Speaker 2>their data is not out in the cloud. And so

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<v Speaker 2>when we talk to a lot of customers, they see

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<v Speaker 2>this new era of generative AI as a accelerator for reasons,

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<v Speaker 2>to get their data in the cloud, to put it

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<v Speaker 2>in a data lake, and to be organized in a

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<v Speaker 2>secure and safe environment where they can actually go and

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<v Speaker 2>innovate and deliver value for their business. And so we're

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<v Speaker 2>actually seeing this as an accelerator. Actually, when I talk

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<v Speaker 2>to most customers, they're trying to find ways that they

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<v Speaker 2>can migrate more of their workloads and more of their

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<v Speaker 2>data into the cloud faster than they ever have before.

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<v Speaker 2>And so we think that that's a huge opportunity for

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<v Speaker 2>AWS business. But we also think that's a big opportunity

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<v Speaker 2>for our customers as they can gain agility and can

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<v Speaker 2>innovate faster for their own customers once all those workloads

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<v Speaker 2>are in the cloud and they can focus on delivering

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<v Speaker 2>value to their own customers.

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<v Speaker 3>Alphabet and Microsoft and IBM and all that is also

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<v Speaker 3>see this as their opportunity too, Matt, And I'm interested

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<v Speaker 3>as someone who basically helped build cloud as a business

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<v Speaker 3>model back from two thousand and five, when you're intenning

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<v Speaker 3>how you think Amazon and AWS is different at this moment.

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<v Speaker 4>Yeah, you're right.

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<v Speaker 2>So, and as you mentioned, I've been working in AWS

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<v Speaker 2>since two thousand and five, two thousand and six, since

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<v Speaker 2>we started AWS, and so if you look about where

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<v Speaker 2>we're different, there's a couple of things that I would

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<v Speaker 2>focus on. Number one is we have a lot of

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<v Speaker 2>experience going and helping customers in the cloud world.

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<v Speaker 4>And from the very beginning, when.

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<v Speaker 2>We very first started AWS, we said Priority zero for

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<v Speaker 2>us is security. Customers are trusting us with their business,

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<v Speaker 2>they're trusting us with these critical workloads, and so security

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<v Speaker 2>is first and foremost.

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<v Speaker 4>Second is operational excellence.

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<v Speaker 2>And so we know that for our customers, if we

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<v Speaker 2>have to be secure and we have to perform an

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<v Speaker 2>outstanding way, so performance security, those are the two things

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<v Speaker 2>that we focus on. And then we think about how

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<v Speaker 2>do we help customers innovate, And we really like to

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<v Speaker 2>partner with our custom We want to lean in. We

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<v Speaker 2>want to understand where their struggles are, where they're having

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<v Speaker 2>problems with their on prem environments, or where they're slowing

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<v Speaker 2>down because they're doing too much of the muck we

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<v Speaker 2>call it, instead of actually innovating for their customers. And

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<v Speaker 2>then we deliver a really rich set of services. And

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<v Speaker 2>if you go look at AWS, we have by far

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<v Speaker 2>the widest set of services and capabilities that allow customers

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<v Speaker 2>of all sizes, whether they're startups or enterprises or governments,

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<v Speaker 2>to go and innovate out there for customers. And so

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<v Speaker 2>when you have that baseline of security and operational excellence

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<v Speaker 2>and then you have the broadest set of capabilities, it's

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<v Speaker 2>for many customers and most customers out there, it's a

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<v Speaker 2>no brainer as to what's the optimal platform to go from?

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<v Speaker 3>And so, yeah, so is that no brainer? Meaning you're

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<v Speaker 3>still accelerating for AWS growth as we see that pivot

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<v Speaker 3>point in the previous quarter. Are you still accelerating profits too?

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<v Speaker 4>Absolutely?

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<v Speaker 2>AWS is still growing faster than any other cloud provider

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<v Speaker 2>out there on an absolute basis, and we see customers leaning

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<v Speaker 2>in and so we see again this is such early

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<v Speaker 2>days for the cloud. It's really is early days, and

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<v Speaker 2>so we see massive growth and acceleration ahead of us

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<v Speaker 2>and huge opportunity for the business.

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<v Speaker 1>Matt, since you've been in the job for thirty days,

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<v Speaker 1>what's your understanding of what a run rate in the

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<v Speaker 1>billions of dollars tied to generative AI actually meaning what

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<v Speaker 1>have you come to see across your desk? Is that

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<v Speaker 1>being a business of Yeah?

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<v Speaker 2>And as you mentioned, general AI is already a multi

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<v Speaker 2>billion dollar business for AWS, and so it is a

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<v Speaker 2>big business for us today. And when you sit down

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<v Speaker 2>with customers, I think you look at kind of where

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<v Speaker 2>this transition has gone. It started out called a year

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<v Speaker 2>year and a half ago with chat GPT, and everybody

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<v Speaker 2>thought this was a fantastic technology, and it.

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<v Speaker 4>Is and it was.

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<v Speaker 2>And then so the first thing that everybody did is

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<v Speaker 2>they basically built chatbots for their website, right. And so

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<v Speaker 2>as customers, though, are transitioning, they're trying to say, where's

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<v Speaker 2>the real enterprise value for me? How am I delivering

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<v Speaker 2>value to my customers? And so when again when they

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<v Speaker 2>think about AWS, they say, I have a platform that

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<v Speaker 2>I can build on. It's secure at the baseline, it

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<v Speaker 2>has a bunch of capabilities that I can actually go

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<v Speaker 2>and build value for my customers. And so we increasingly

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<v Speaker 2>are seeing customers say, how do they get real value

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<v Speaker 2>for their business? How are they delivering revenue growth? How

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<v Speaker 2>are they delivering real cost savings? How are they completely

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<v Speaker 2>transforming their business? That's just different than how anyone has

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<v Speaker 2>done their industry before. And I think that's the real potential.

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<v Speaker 2>Even though today it is a multi billion dollar business.

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<v Speaker 2>I think it really is the nascent part of this

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<v Speaker 2>technology because it's what it's capable of doing. Is progressing

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<v Speaker 2>so quickly that I think a year two years from

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<v Speaker 2>now you're going to see many industries out there have

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<v Speaker 2>completely changed how they think about work, how they think

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<v Speaker 2>about delivering value to their customers. And it's a super

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<v Speaker 2>exciting time for innovation and for technology as a whole.

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<v Speaker 1>For our Bloomberg television and radio audiences around the world.

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<v Speaker 1>We're speaking with the AWSCO Matt Garman thirty days into

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<v Speaker 1>the job. An important development your predecessor was the anthropic investment,

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<v Speaker 1>most recently the Aqua hier so to speak of a

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<v Speaker 1>debt labs, which is more focused on non AWS at Amazon.

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<v Speaker 1>How much do those deals indicate that Amazons had to

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<v Speaker 1>bring in engineering talent to work on large language models.

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<v Speaker 2>How we think about it is the potential is massive,

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<v Speaker 2>and we think that if you look at the AI space,

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<v Speaker 2>there's not going to be one solution for everyone. There's

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<v Speaker 2>not going to be one model that's perfect for all

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<v Speaker 2>use cases. Our view is that customers are going to

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<v Speaker 2>need a variety of capabilities, They're going to need large

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<v Speaker 2>models to do reasoning. And the anthropic models, by the way,

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<v Speaker 2>are fantastic, and the new claud three point five sonnet

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<v Speaker 2>model is by far the best in the world right now,

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<v Speaker 2>and that's fantastic and we love working with that team.

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<v Speaker 2>But a lot of customers, we find are combining those

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<v Speaker 2>large models with small models, and then they also need capabilities,

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<v Speaker 2>and one of the areas that we're really excited about

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<v Speaker 2>is agentic workloads, where models are actually going to be

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<v Speaker 2>able to call out and do things out there in

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<v Speaker 2>the world, real world, not just summarize data or give

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<v Speaker 2>you information, but actually go and perform actions. And that's

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<v Speaker 2>part of where we're really excited about the technology from ADEPT.

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<v Speaker 4>And so we think that there's a lot of these

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<v Speaker 4>different components.

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<v Speaker 2>Many of them are going to be built in house

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<v Speaker 2>and have been built in house with AWS. Many of

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<v Speaker 2>them come from external capabilities, and we think that there's

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<v Speaker 2>going to be a really rich ecosystem of capabilities that

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<v Speaker 2>customers are going to want to build from. And many

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<v Speaker 2>of them are partners with us, and many of them

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<v Speaker 2>will provide US first party offerings.

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<v Speaker 3>A rich ecosystem needs rich infrastructure and energy. At that map,

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<v Speaker 3>how are you seeing the need for energy growing an aws,

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<v Speaker 3>how are you satisfying it?

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<v Speaker 1>Then?

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<v Speaker 3>Much talk about nuclear for example.

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<v Speaker 2>Yeah, it's a great point, and it does need a

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<v Speaker 2>lot of energy, and that's why if you rewind even

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<v Speaker 2>several years ago, we're the single largest purchaser of renewable

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<v Speaker 2>energy in the world for many years in a row now,

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<v Speaker 2>and part of that is we saw this coming and

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<v Speaker 2>we've been thinking about how do we build up enough

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<v Speaker 2>power in a sustainable way that's carbon neutral that we

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<v Speaker 2>can support the energy needs for technology.

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<v Speaker 4>And so.

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<v Speaker 2>We think that that growth is going to be significant,

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<v Speaker 2>and there's a lot of work that's going to go

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<v Speaker 2>forward in continuing to make sure that we have enough

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<v Speaker 2>power to power the workloads that our customers need.

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<v Speaker 4>But that's part of.

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<v Speaker 2>What I think we bring to the table. We've spent

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<v Speaker 2>a lot of time getting good in this space. We've

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<v Speaker 2>spent a lot of time thinking about how do we

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<v Speaker 2>make sure that we have enough sustainable power, how do

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<v Speaker 2>we make sure that we have enough components in our

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<v Speaker 2>supply chain, and how do we manage that spend. As

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<v Speaker 2>you mentioned, it's a pretty significant infrastructure investment. How do

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<v Speaker 2>we make sure that we manage that in a reasonable way,

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<v Speaker 2>so that it's good for the AWS business and that

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<v Speaker 2>we're being responsible with how much capital we spend. But

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<v Speaker 2>we can also grow the power footprint that the world

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<v Speaker 2>needs in a sustainable way. I think that's an important

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<v Speaker 2>thing of what ABS brings for people.

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<v Speaker 3>Can I ask about therefore that profitability because there has

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<v Speaker 3>been marked improvement in profitability, But the question is at

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<v Speaker 3>the time of investment, are you managing this by cutting

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<v Speaker 3>costs by alsomny having let go of people, You're managing

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<v Speaker 3>to equate it more by just more higher pricing for

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<v Speaker 3>these AI related services.

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<v Speaker 2>Now we think about this business like this business will

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<v Speaker 2>have ebbs and flows over time, particularly as we make

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<v Speaker 2>large financial investments in the future, whether it be large

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<v Speaker 2>investments in power or data centers or components and things

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<v Speaker 2>like that. So the profitability of the business will go

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<v Speaker 2>up and down over time. But long term, we think

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<v Speaker 2>that AWS will continue to be a very profitable business

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<v Speaker 2>for Amazon. But for us, it's all about investing in

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<v Speaker 2>the future and making sure that we have the right team,

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<v Speaker 2>that we have the right setup in place, and we

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<v Speaker 2>have a long term vision of what this business is

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<v Speaker 2>going to be. So we're not thinking about particularly short term,

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<v Speaker 2>but we're thinking about how do we really go after

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<v Speaker 2>that long term potential so that AABS continues to grow

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<v Speaker 2>at a rapid rate for many, many years. And we

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<v Speaker 2>want to make sure that we have that right team

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<v Speaker 2>in place, we have the right infrastructure in place, and

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<v Speaker 2>we have the right investments in place so that we

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<v Speaker 2>can be there for customers when they need us.

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<v Speaker 1>Now, we dedicate a lot of time on this program,

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<v Speaker 1>covering your proprietary silicon efforts Trainium for example, So we've

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<v Speaker 1>done that. Could we focus on Nvidia and in discuss

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<v Speaker 1>with me your relationship with that company, how supply of

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<v Speaker 1>their AI accelerators is, and whether you actually will give

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<v Speaker 1>us a forecast of how many accelerators you think you'll

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<v Speaker 1>take from Nvidia in the next twelve months or calendar

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<v Speaker 1>twenty four.

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<v Speaker 2>It's a great question. And Nvidia is an incredibly important

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<v Speaker 2>partner of ours. They make a fantastic processor, They have

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<v Speaker 2>executed incredibly well and have by far the world's best

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<v Speaker 2>technology in this space and have for the last couple

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<v Speaker 2>of years. And we believe that AI technologies are going

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<v Speaker 2>to rely on Nvidia and GPUs for many years to come,

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<v Speaker 2>and so we think that they're a super important long

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<v Speaker 2>term partner of ours. In fact, we're getting deeper and

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<v Speaker 2>deeper with them. Jensen has said on stage that AWS

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<v Speaker 2>is their technology partner that they're building their own models

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<v Speaker 2>on top of. They believe that, and they've seen that

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<v Speaker 2>AWS has by far the best performing technolog whether it's

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<v Speaker 2>on the network side or the availability of the GPUs,

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<v Speaker 2>which actually is a super important part of building models.

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<v Speaker 2>And so Nvidia trusts AWS to go and build their

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<v Speaker 2>long term models, and we lean in on Nvidia for

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<v Speaker 2>that too and learn about what's working well, what in

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<v Speaker 2>the next generation technology will they need from our data

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<v Speaker 2>centers and networking, And we really have a great collaboration

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<v Speaker 2>there to ensure that our AI customers can jointly take

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<v Speaker 2>advantage of the best technology that Nvidia has to offer

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<v Speaker 2>and AWS has offer in a combination so that they

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<v Speaker 2>can really deliver the best technology for the world.

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<v Speaker 3>Partnerships being built. Matt Common, thank you so much for

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<v Speaker 3>joining us today, awsk you for having mea