The firm remains focused on cutting retail prices and speeding delivery times
Despite the improved delivery times, Amazon was still able to slash the “cost to serve” on a per unit basis
At AWS, customers started 2023 by dialing back on cloud spending, but that started to reverse by the end of the year
Jassey says Amazon has growing conviction that Prime Video can be a “large and profitable business on its own” while Kuiper is a “very large revenue opportunity”
Amazon thinks it will be a huge player in AI as it offers products and services in the three critical “layers” of the GenAI stack: 1) the bottom layer for developers and companies wanting to build foundation models (FMs); 2) the middle layer for customers seeking to leverage an existing FM to build GenAI applications; and 3) the top, or application, layer.
Amazon is coming after Nvidia’s position in AI chips – “To date, virtually all the leading FMs have been trained on Nvidia chips, and we continue to offer the broadest collection of Nvidia instances of any provider. That said, supply has been scarce and cost remains an issue as customers scale their models and applications. Customers have asked us to push the envelope on price-performance for AI chips, just as we have with Graviton for generalized CPU chips. As a result, we’ve built custom AI training chips (named Trainium) and inference chips (named Inferentia)”
The core businesses of retail and cloud computing still have a ton of growth ahead of them – “while we have a nearly $500B consumer business, about 80% of the worldwide retail market segment still resides in physical stores. Similarly, with a cloud computing business at nearly a $100B revenue run rate, more than 85% of the global IT spend is still on-premises”