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These days, this may happen when a big tech company invests in an AI startup, and then that startup buys cloud and AI services from the big tech company. These arrangements are called "round tripping" because the money invested comes right back in the form of cloud spending. When Amazon Web Services invested $4 billion in Anthropic, the AI startup agreed to use AWS as its "primary cloud provider." In recent years, cloud spending growth has slowed as some customers try to save money in the midst of a lackluster economy with high inflation. An Amazon spokesperson declined to say whether AWS revenue numbers include cloud spending by Anthropic or not.
Persons: , what's, Rishi Jaluria, GCP, Jaluria Organizations: Service, Business, Amazon Web Services, Google, Microsoft, OpenAI, Oracle, RBC Capital, RBC, Amazon Locations: Anthropic
Read previewAt an October all-hands meeting, an Amazon Web Services employee asked executive Matt Garman about the company's difficult work environment. The people who spoke with BI about Garman asked not to be identified so they could freely discuss his abilities. One AWS employee pointed out to BI that Amazon Q was months behind the launch of Microsoft's AI Copilots. Associated PressOutside of AI, AWS has struggled in its core startups and small business segments, failing short of sales targets last year, as BI previously reported. Those customers are particularly important for AWS because the company built its early business by embracing that market.
Persons: , Matt Garman, Garman, It's, Adam Selipsky, Selipsky, Andy Jassy, Matt, Amazon's, Patrick Neighorn, He'd, We're, Neighorn, it's, Claude, AWS's, let's Organizations: Service, Amazon Web Services, AWS, Business Insider, Employees, Business, Amazon, Stanford, BI, Mizuho Securities, Q, Cohere, Mistral, Google, Associated Locations: Anthropic
Selipsky's three years as AWS CEO were marked by mixed results. AdvertisementHe steered through some of the cloud business' slowest growth rates, largest layoffs, and biggest challenges in the artificial intelligence space. AdvertisementAmazon's generative AI service Bedrock was delayed after originally being scheduled to launch in the fall of 2022, the person said. Garman was once considered a frontrunner to replace former AWS CEO Andy Jassy in 2021 when Jassy took over as Amazon's CEO. Some insiders referred to Selipsky as "just a sales guy" and "uninspiring," as the cloud leader faced unprecedented competition in generative AI.
Persons: , Adam, Selipsky, shakeup, Patrick Neighorn, Matt Garman, Garman, Andy Jassy, Jassy, Amazon, Ashley Stewart Organizations: Service, Web Services, Business, AWS, Amazon, BI, Rivals Microsoft, Google
Read previewExpect a lot more talk of generative AI at Amazon cloud computing events this year. "Up to 80% of all Global Summit sessions will be sourced from 2023 re:Invent sessions tagged to Gen AI." The new directive shows how Amazon is going to extraordinary lengths to promote its AI prowess, at a time when interest in generative AI is skyrocketing. On Tuesday, Jassy said Amazon is on pace to generate "multi-billion" dollars in revenue this year from its generative AI offerings. Generative AI has already been accounting for a larger share of Amazon's public comments.
Persons: , Patrick Neighorn, we've, Andy Jassy, Jassy, It's Organizations: Service, Services, Business, AWS, Amazon, Global, Microsoft, Google, Meta
"Q should be more polished, given how far behind we are," one of the Amazon employees told BI. An Amazon spokesperson said Q is not based on a single AI model, and its launch followed standard operating procedure. They said Q primarily used Claude Instant 1.2, a cheaper, lighter, and faster version of the AI model that was released in August. More approachable, but too simpleCurrently, Amazon Q is only offered in preview mode to select customers. Some AWS employees, however, say it feels like the company is in a mad dash to release new products, even if they are subpar.
Persons: , Q, That's, Anthropic's Claude, It's, Google's Bard, Claude, Andy Jassy, Richard Brian Bedrock, Dario Amodei, Anthropic, Randall Hunt, Hunt, Corey Quinn, Quinn, Amazon's Trainium, Adam Selipsky, Selipsky, Amazon's Organizations: Service, Amazon, Business, Microsoft, Google, Claude, AWS's, Oracle, Duckbill, Nvidia, AWS
One in particular is open only to very important cloud customers: a meeting for "XXL" or "extra-extra-large" AWS users. Roughly 50 people attended the meeting, they said, including about a dozen AWS representatives and employees from eight large AWS customers, including Salesforce and Adobe. Not all of the largest AWS customers attended the meeting. Though the meeting is for important customers, AWS CEO Adam Selipsky did not attend, the people said. Do you have information or insight to share about AWS or other large cloud providers?
Persons: Adam Selipsky, Ellen Thomas Organizations: Web Services, AWS, Business, Venetian Convention, Expo, Adobe, FinOps Foundation, Microsoft, Google Locations: Las Vegas, ethomas@insider.com
Some Amazon Web Services employees are concerned about a large number of departures among its senior engineers. At last month's internal staff meeting for AWS, VP of infrastructure services Prasad Kalyanaraman answered an employee question about turnover among senior engineers, according to a transcript of the meeting obtained by Business Insider. It is one of the many challenges AWS employees are currently dealing with, alongside slowing growth and a more bureaucratic culture, as BI previously reported . As we've previously told Insider, attrition among AWS employees has declined in recent years and to suggest anything otherwise is inaccurate. Amazon unveiled Amazon Q this week, an AI chatbot for businesses, and previously launched CodeWhisperer, a coding assistant for developers.
Persons: Prasad Kalyanaraman, Kalyanaraman, Rob Munoz, we've, Prasad, Munoz, Peter DeSantis, DeSantis, Charlie Bell, Rachel Thornton, Chris Vonderhaar Organizations: Web Services, Business, Amazon's, AWS
AWS's growth rate has slowed and its SMB sales unit will likely miss 2023 targets, sources say. AWS built a lead in cloud computing by better catering to startups and small businesses than rivals. The Amazon Web Services team responsible for selling services to startups and small businesses is struggling to meet its 2023 sales goals, two people with direct knowledge of the situation tell Business Insider. One believes the SMB team will surely miss its targets and said managers are facing mounting pressure to improve their numbers. Both people requested anonymity because they are not authorized to speak to the press.
Organizations: Web Services, AWS, Business
AdvertisementIn today's big story, we're looking at the growing tension at AWS with rising employee burnout. Just like OpenAI's ChatGPT or Google's Bard, Amazon Q is a generative AI chatbot users can talk to like a human. Amazon Web Services, which developed Amazon Q, announced the new product under the fanfare of its annual event in Las Vegas, AWS re:Invent. Business Insider's Eugene Kim, our resident Amazon expert, has a report on the growing tension and burnout among AWS employees. Jon Krause for InsiderThe burnout at AWS reminds me of another company at the top of its field facing turmoil: Goldman Sachs.
Persons: , you've, Taylor, Pena Popo, Noah Berger, Bard, Insider's Eugene Kim, ChatGPT, Jon Krause, Goldman Sachs, Goldman, David Solomon, haven't, BI's Dakin Campbell, Bethany McLean, Goldman aren't, Goldman's, Sylvain Gaboury, Patrick McMullan, Slaven, The New York Times Elon Musk, Tesla, They've, Joe Santagato, Elon Musk, Drazen, Dan DeFrancesco, Naga Siu, Hallam Bullock, Lisa Ryan Organizations: Spotify, Getty, Web Services, Microsoft, Goldman, Slaven, The New York Times, Amazon, Business, American Express, Federal, Paris, Paralympic, Kroger, Dell Locations: Las Vegas, Austin , Texas, New York City, San Diego, London, New York
For Amazon, AWS is more important than ever. Targets missedAWS is falling short of reaching sales goals in its startups and small-business segments, two employees told BI. Burnout and attritionSeveral AWS employees also pointed to high turnover as a major point of concern. AWS employees told BI it still remains to be seen how all these changes will manifest in the months to come. "The most significant single sentiment we feel is uncertainty," one of the AWS employees told BI.
Persons: Matt Garman, Garman, Mark Shmulik, Bernstein, Rob Munoz, Munoz, Charlie Bell, Rachel Thornton, Chris Vonderhaar, Peter DeSantis, DeSantis, Andy Jassy Mike Blake, AWS's, Prasad Kalyanaraman, Kalyanaraman, Amazon's, Bard, Adam Selipsky, Adam Selipsky Noah Berger, Selipsky, Andy Jassy, Jeff Bezos, Jassy, Geekwire Organizations: Amazon Web, AWS, Business, Amazon, SMB, Enterprise, Reuters, Microsoft, Google, BI Locations: Las Vegas, AMZN's, billings
The chaos is good for Google, Amazon, and others trying to catch OpenAI. Especially Google and Amazon, which were caught flat-footed by ChatGPT's rapid success and the impressive capabilities of GPT-4 and other OpenAI models. "In a fast-moving race, this lap has the advantage going to Google and Amazon but it's a marathon, not a sprint." Microsoft has invested billions of dollars in OpenAI and provides cloud infrastructure that runs the startup's AI products. Interestingly, Google and Amazon recently invested billions of dollars in Anthropic, an AI startup that is probably the closest rival to OpenAI in terms of talent and product capabilities.
Persons: OpenAI, Sam Altman, Greg Brockman, , ChatGPT, OpenAI's, Altman, pic.twitter.com, Guy, @buccocapital, Oren Etzioni, there's Organizations: Google, Service, Employees, Madrona Venture, Microsoft, Amazon Locations: Silicon
An Amazon cloud VP sent a motivational email to his team last week after GitHub, the developer code-sharing site owned by Microsoft, held an artificial intelligence event and released a bunch of new products. In it, he noted the products announced at the GitHub Universe developer conference were similar to what his team is currently working on. One of the big products announced at GitHub Universe was the general availability of its Copilot Chat, a chatbot that helps answer developer questions and identify bugs. AWS, meanwhile, has announced products like Bedrock, a service that makes foundation models more easily accessible, and CodeWhisperer, a coding assistant app. The new chatbot for AWS developers is one example of that strategy, as it's intended to guide developers towards more AWS services when they are building AI products, the person familiar with the project told BI.
Persons: GitHub, Deepak Singh, Singh, They've, Google's Bard, it's Organizations: Microsoft, Business, Amazon, Services, GitHub, BI, AWS
Startup shutdowns will continue at an elevated pace for the next 2 to 3 quarters, according to Peter Walker, head of insights at Carta. There's one big caveat to these concernsThe generative AI boom is firing up demand for AI cloud services. And they're using some of that new money to spend on AI cloud services. The company's cloud growth was healthy in the third quarter, helped by demand for new AI services. The company has been rolling out a slew of AI cloud offerings lately.
Persons: It's, , Carta, Peter Walker, Bernstein, Ruth Porat, Amy Hood, they're, we'll Organizations: Service, Carta, Services, Google, Amazon, Microsoft
Cloud technology has proved a powerful tool for sports organizations around the world. This article is part of "Build IT," a series about digital tech and innovation trends that are disrupting industries. Cloud data and services are accessible anytime and from any location. AWSShe said AWS clients such as the German professional football league Bundesliga used cloud tech for improving the fan experience. "Every single element of this needs cloud services, scale, flexibility, security, and interoperability, which is a very important aspect."
Persons: , Julie Souza, Drew Crisp, " Crisp, Crisp, Derek Schiller, Paola Olivari, Olivari, Lionesses, Alex Greenwood, Katie Robinson, Lotte Wubben, Naomi Baker, they're, Brian Shield, Souza, Ross McGraw Organizations: Service, Web Services, Amazon Web Services, Bundesliga, AWS, NFL, Liverpool FC, Liverpool Football, Atlanta Braves, Payments, Global Payments, Google, Football Association, FA, Boston Red Sox, East Coast MLB, Amazon Prime, Technology Locations: Moy, St, George's, Fenway
There's a new stack of hardware, software, tools, and services that will power AI applications for years to come. Cloud 2.0Another key point here: Most AI developers already know how to use CUDA and Nvidia GPUs. Arguably, Nvidia has already created an AI cloud platform – as AWS once did for the Cloud 1.0 era. James Hamilton is an AWS cloud infrastructure genius who can take on Nvidia, even if the chipmaker has a major head start. Her startup spent months building a data center from scratch to help customers train AI models.
Persons: , Jensen Huang, Nvidia Rick Wilking, Andrew Ng, CUDA, Michael Douglas, Bernstein, Douglas, Luis Ceze, Ceze, It's, Andy Jassy, Adam Selipsky, James Hamilton, Oren Etzioni, Claude, Dario Amodei, Anthropic Anthropic, Noah Berger, Sharon Zhou, Zhou, Lamini didn't, Etzioni Organizations: Amazon Web Services, Nvidia, Service, Home Depot, AWS, VMware, Cloud, Madrona Venture, Amazon, Amazon Web, Annapurna Labs, Intel, AMD Locations: San Francisco, Seattle, Selipsky
"Those were judgment decisions by our leadership team," Jassy continued. As a leadership team, we've decided that we will be better for customers and for our business being in the office." Jassy's comments are the latest in the months-long tension between Amazon's employees and leadership team over the company's aggressive RTO policy. Amazon's top leadership looked at "a number of pieces of data" over the past two years regarding remote work, Jassy said. Another person blamed Amazon's leadership team for over-expanding during the pandemic under the belief that the hyper growth would last for a long time.
Persons: Andy Jassy, Jassy, we've, didn't, doesn't, It's, Amazon's, it's Organizations: Amazon, Services, AWS
Amazon can build on its already stellar year as revenue from its cloud business picks up steam once again, according to boutique equity research firm Redburn. The analyst cited the potential for Amazon Web Services — the company's cloud computing business — to see growth reignited after a slowdown. AWS holds leading market positions in areas such as databases, data warehouses, data lakes and machine learning, Haissl said. AWS reported 12% growth in the second quarter, surpassing analysts' forecast by 200 basis points, according to the note. Haissl also expects AWS revenue to grow by more than 20% and 30% in the third and fourth quarters of this year, respectively.
Persons: Alex Haissl, Haissl, Gartner, , Michael Bloom Organizations: Amazon Web, AWS, Amazon Locations: Thursday's, 2Q23
For the second quarter, Amazon's revenue grew 11% to $134.4 billion, beating estimates of $131.5 billion from analysts polled by Refinitiv. In recent months, Amazon Web Services (AWS) saw its sales growth slow as wary businesses scrutinized their cloud bills. The unit beat estimates of around $21.7 billion in second-quarter cloud sales, increasing them 12% to $22.1 billion. Its rivals posted bigger jumps off smaller bases: 28% growth in Alphabet's June-quarter cloud revenue and a 26% quarterly increase for Microsoft's Azure. Longer-term, Amazon aims to turn one unit, its $35 billion in yearly gross business-to-business e-commerce sales, into $100 billion, Jassy told analysts.
Persons: Pascal Rossignol, Brian Olsavsky, Olsavsky, Andy Jassy, Arun Sundaram, Sundaram, Jassy, Thomas Monteiro, Investing.com, Monteiro, Refinitiv, Chavi Mehta, Jeffrey Dastin, Noel Randewich, Arun Koyyur, Aurora Ellis, Chris Reese Organizations: REUTERS, Amazon.com Inc, Amazon, Google, Microsoft, Refinitiv, Amazon Web Services, CFRA Research, Reuters, Thomson Locations: Lauwin, France, Alphabet's, Bengaluru, Jeffrey Dastin San Francisco
Amazon delighted investors on Thursday, posting earnings of 65 cents a share, blowing past estimates of 35 cents a share. In Jassy's prepared remarks at the start of Thursday's earnings call, cost cuts were one of his central themes. The broad-based changes under Jassy have left the company less dependent on its cloud business, Amazon Web Services, for profits. In the second quarter, Amazon was able to expand its overall margin while AWS's profit margin declined to 24.2% from 29% a year earlier. But at only 12% year-over-year growth, the cloud business is seeing its slowest expansion since Amazon began breaking out its revenue in 2015.
Persons: Andy Jassy, Jeff Bezos, he's, Bezos, Jassy, Jassy's, Amazon Organizations: New York Times, Amazon, North America, Amazon Web, AWS Locations: New York City, riskier, North, America
Amazon Web Services created an "AWS Compute Services" team, an email viewed by Insider shows. It combined services such as EC2 and serverless products like Lambda into a single organization. Amazon Web Services created a new "AWS Compute Services" team, according to an internal email viewed by Insider, combining services such as its Elastic Compute Cloud and container and serverless products including Lambda into a single organization. Deepak Singh, the vice president who previously ran AWS containers and serverless products, is leading the new AI organization. Barry Cooks, the vice president who runs the Amazon Elastic Kubernetes Service, now reports to Brown.
Persons: Deepak Singh, David Brown, EC2, Holly Mesrobian, Brown, Nick Coult, Ajay Nair, Spencer Dillard, Ahmed Usman Khalid, Barry Cooks, Jody Gibney, Ashley Stewart Organizations: Amazon Web Services, Insider, Lambda, AWS, Web Services, Compute Services, Service, Registry
Amazon's AWS Honeycode app-building software is being phased out. It's business application team has struggled. Another Amazon business application is struggling. This time it's AWS Honeycode, a cloud-based app-building service. Besides Honeycode, Amazon has axed the Halo health band, the Scout delivery robot, and a number of long-term projects from its Grand Challenge moonshot lab.
Persons: Honeycode, they're, hasn't, Slack, Sriram Devanathan, Adam Bosworth, Adam Seligman, Seligman Organizations: AWS, Amazon, Service, Amazon Connect, SAP, Google, Microsoft
Deal cycles are back to closing at about 30 to 60 days in Q2, a Mizuho Bank report said. The demand for generative AI, which operates in the cloud, has driven the stabilization. The big cloud-computing budget cut could be subsiding thanks to generative AI, and Amazon Web Services could benefit massively, according to a new survey of CIOs from Mizuho Bank. CIOs who were focused on trimming cloud budgets in the first quarter are now looking to spend those savings on generative AI. Customers are especially excited about Bedrock, Amazon's foundational model for developers to build generative AI on, because of its privacy features, the survey said.
Persons: CIOs, Mizuho, Bernstein, Bard Organizations: Mizuho Bank, Amazon Web, Mizuho Bank's, AWS, Microsoft, Google, Analysts Locations: Mizuho, OpenAI
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMicrosoft and Google will be the biggest short-term beneficiaries of A.I., says Jefferies' Brent ThillJefferies' Brent Thill joins 'Squawk on the Street' to discuss cloud consolidation impacting AWS's path to recovery, pricing in A.I. 's impact, and the growth trajectory for tech's magnificent seven.
Persons: Jefferies, Brent Thill Jefferies, Brent Thill Organizations: Microsoft, Google
Amazon and the Dutch government are in talks to significantly expand the cloud deal between them. Amazon just passed an important data privacy test by the Dutch government. Amazon Web Services is in discussion to significantly expand its cloud contract with the Dutch government. The deal talks are taking place in the midst of a series of Dutch audits over AWS's data privacy measures, according to the document. Last week, AWS passed the Dutch government's Data Privacy Impact Assessment (DPIA), a key part of complying with Europe's General Data Protection Regulation, known as GDPR.
Persons: Amazon's, Eugene Kim Organizations: Amazon, Dutch Ministry of Justice, AWS, Security, Data, New York Times Locations: Government
Fidel Contreras is a data center operations lead at Amazon Web Services (AWS). Contreras applied to an AWS technical learning program and started as an apprentice at age 18. Five years and one promotion later, I now lead a team of data center operations technicians. I take advantage of ongoing AWS skills trainings, like the Cloud Practitioner and Solution Architect courses. Fidel Contreras is a data center operations lead at Amazon Web Services (AWS).
Persons: Fidel Contreras, Contreras, I'd, It's, , there's Organizations: Amazon Web Services, Morning, Amazon, AWS's East, AWS, Cloud Practitioner Locations: America, AWS's East Oregon
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