About this weblog

What you need to know: This weblog captures key data points about the global telecoms industry. I use it as an electronic notebook to support my work for Pringle Media.

Wednesday, May 1, 2024

Amazon Flags "Unbelievable" Growth Opportunities

Amazon flagged that it plans to "meaningfully increase" capital investment in 2024, primarily to support growth in AWS, including generative AI. Amazon defines capital investment as a combination of capex plus equipment finance leases.  In 2023, overall capital investments were 48.4 billion US dollars. In the first quarter of 2024, Amazon invested 14 billion dollars, which CFO Brian Olsavsky said is likely to be the "low quarter for the year."

AWS increased revenue 16% year-on-year (excluding the impact from the leap year) in the first quarter to 25 billion dollars.  "I think there are really unbelievable growth opportunities in front of us," said Amazon CEO Andy Jassy. "85-plus percent of the global IT spend is on premises. And if you believe that equation is going to flip, which we do, it means we have a lot of growth in front of us, and that's before the generative AI opportunity, which I don't know if any of us have seen a possibility like this in technology in a really long time, for sure, since the cloud, perhaps since the Internet." 

Jassy contended that generative AI workloads are largely going to be built from scratch on the cloud. He said that AWS is already seeing a multibillion-dollar revenue run rate in AI, claiming that tens of thousands of companies are building large language models on top of Amazon Bedrock.  "Those models consume an incredible amount of data with a lot of tokens, and they're significant to actually go train.... and I expect an increasing amount of those to be built on AWS over time because our operational performance and security, as well as our chips, both what we offer from NVIDIA. But if you take Anthropic, as an example, they're training their future models on our custom silicon on Trainium."

As companies bring their large language models into production, AWS will "see significant run rates," Jassy noted. "You spend much more in inference than you do in training because you train only periodically, but you're spinning out predictions and inferences all the time. ... many companies, their models and these generative AI applications are going to have their most sensitive assets and data. And it's going to matter a lot to them what kind of security they get around those applications." Source: transcript of Amazon earnings call

No comments: