Amazon will spend $75 billion in 2024 – “the majority on AWS” said CEO Andy Jassy on an earnings call – as capital expenditure hits record highs.
That investment comes as AWS growth “reaccelerates” (to a $110 billion run rate) with the “increased bumps here really driven by generative AI.”
So said Jassy on a Q3 call, adding that the cloud provider’s AI business is “growing three times faster at its stage of evolution than AWS did itself.”
He admitted to cloud capacity constraints in a Q&A.
“I believe we have more demand than we could fulfill if we had even more capacity today. I think pretty much everyone today has less capacity than they have demand for, and it's really primarily chips that are the area where companies could use more supply,” Jassy told analysts, adding that Amazon has “gone back to our manufacturing partners a couple of times now to produce a lot more Trainium [chips] than we anticipated…”
“The faster we grow demand, the faster we have to invest capital in data centers and networking gear and hardware. And of course, in the hardware of AI, the accelerators or the chips are more expensive than the CPU hardware” he spelled out for analysts on the October 31 call.
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Talking up its own AI use, as Google and Microsoft also did this week, Amazon flagged how it is using generative AI-powered creative tools across display, video, and audio, “including our video generator that uses a single product image to curate custom AI-generated videos.”
As part of its growth Amazon wants to bake much more AI into its Alexa personal assistant, with future generations “better at not just answering questions and summarizing the indexing and aggregating data, but also taking actions” said investor relations VP David Fildes in a Q&A.
“If we rearchitect the brains of Alexa with next-generation foundational models, which we're in the process of doing, we have an opportunity to be the leader in that space” - David Fildes
Investment is also being allocated to further automation.
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A new Amazon fulfilment centre in Louisiana, for example, incorporates its newest robotics inventions has cut processing times by 25%. (It boasts a AI-powered trio of robotic arms dubbed Robin, Cardinal, and Sparrow that sort, stack, and consolidate items; and Amazon’s first autonomous robot.)
Amazon added that it continues to see customers use multiple model types from different model providers and multiple model sizes in the same AI application via its Bedrock service. AWS revenue for the quarter was $27.5 billion, up 19.1% year over year, excluding FX impact.
AWS operating income was $10.4 billion, up $3.5 billion on “a continued focus on cost control, including a measured pace of hiring, a focus on driving efficiencies in our infrastructure” and server life extension.
