Yahoo Finance AWS CEO on AI: 'We're about 3 steps into a 10K race,' and you'll need the cloud to compete
Amazon is (AMZN) approaching AI cautiously, Amazon Web Services (AWS) CEO Adam Selipsky said on Tuesday in Toronto at the 2023 Collision Conference.
Microsoft (MSFT) and Alphabet (GOOG, GOOGL) have been duking it out in the AI match, but comparatively, Amazon has been quiet.
To be sure, AWS is launching its own generative AI product, called Bedrock. But overall, Amazon hasn't yet sought to be consumer facing. As Selipsky said in his talk, it's still too soon to know who the biggest winners in AI will really be.
"We’re about three steps into a 10K race," he said, adding that he does nevertheless believe that generative AI "is the next big wave, and it's a really big one."
Additionally, AI ties back to the cloud, which can make AI more affordable while storing the data necessary to train large-language models, or LLMs. ChatGPT, of course, is the most famous LLM example to date.
"You need the cloud for generative AI – almost nobody is going to want to afford or have the operational excellence and security required to do this stuff themselves," said Selipsky. "In general, AI will happen for the most part in the cloud and as part of your broader data strategy. So many companies already have their data in AWS and you're going to need data to feed into LLMs. It really all becomes part of a single data strategy, and it's incumbent upon us — our customers need us to have great generative AI. But if we do our jobs well, then it'll really be an enabler of the next wave of things that our customers want to do in the cloud."
Meanwhile, Selipsky said, AWS has seen muted growth in the last few quarters as the cloud industry has been rattled by rising interest rates and a difficult macroeconomic environment.
"It's a time of great economic uncertainty around the world, in many different industries," said Selipsky. "I think the entire tech sector, certainly the software sector — almost every company has seen the slowing of growth over the past few quarters."
That slowing growth has not only changed how Amazon and AWS operate (Amazon, over the last few months, has laid off 27,000 workers), it's changed how the company's customers are operating.
"We have a lot of customers who are cost-optimizing," said Selipsky. "They're taking their existing workloads, existing spends, and getting as hyper-efficient as they can be... People are cost-optimizing their existing workloads aggressively into the cloud, so I think cloud migration is alive and well. Our competitive position remains steady, but there's brisk competition, as there should be. So, I think if you take a medium-term perspective, we think there's good prospects ahead."
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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