By Lisa Eadicicco, NCS
Seattle, Wash. (NCS) — Matt Garman helps make your on-line life – your Starbucks order, your Netflix binge, your Pinterest searching– attainable.
As the CEO of Amazon’s cloud computing division, he performs a significant position in deciding the best way to deploy the computing assets wanted to drive the web – a duty that would quickly embrace shaping the way forward for AI.
Few folks know the enterprise in addition to Garman, who sat down with NCS at Amazon’s Seattle headquarters in mid-March. As an intern, he wrote the paper defining Amazon Web Service’s enterprise technique. And he was AWS’ first product supervisor when he joined Amazon full time in 2006, serving to firms pivot to the net in the web’s early days.
Twenty years after its March 2006 launch, AWS has turn into essential for nearly any firm that depends on web-powered instruments. When AWS goes down, elements of society grind to a halt.
That’s big enterprise for Amazon, raking in $128.7 billion in gross sales final 12 months. But AI has upended the tech trade. Amazon’s already making main adjustments, like ratcheting up AI infrastructure spending to an anticipated $200 billion this 12 months and axing tens of 1000’s of jobs.
Garman defined why Amazon views the strikes as crucial. The downsizing is rushing up every day operations, and there’s sufficient pent-up AI demand to maintain Amazon’s cloud instruments busy for the subsequent 5 to 10 years even when the tech stops advancing, he mentioned.
Back when AWS launched, he mentioned, “we had to explain what even the concept of cloud computing was, and why it was a thing, and why it’s something that Amazon would be involved in.”
Those conversations really feel acquainted once more.
“Just fast forward to where we are today in AI, I think (it’s) actually much the same challenges,” Garman mentioned. (*20*)
Amazon’s key to the AI race
AWS launched to supply digital IT infrastructure and servers to companies.
The pitch was easy: Amazon would deal with backend technical operations in order that firms may deal with their merchandise and clients. But it was a dangerous bet for a corporation that rose to fame reshaping the retail trade.
“We’re very comfortable being misunderstood,” Amazon founder Jeff Bezos informed Bloomberg Businessweek in 2006.
Amazonians nonetheless embrace that pondering as we speak, Jeff Barr, chief evangelist for AWS and a 23-12 months veteran of the firm, informed NCS.
Walking via the reception space on my approach to meet Garman, I handed a barista serving particular lattes celebrating AWS’ twentieth birthday.
We’re greeted by a disembodied voice over an intercom asking who we’re right here to see on the restricted ground the place Garman awaits. As I’m escorted to considered one of his private convention rooms, I see a bodily signal of AWS’s large attain: a shelf adorned with autographed soccer helmets – the NFL is considered one of AWS’ largest purchasers, a testomony to how important it’s turn into to life each on-line and off.
It’s a good distance from the conversations about web storage in a Seattle pub that gave rise to AWS. Garman tells me even his personal dad and mom struggled to grasp what cloud computing was when he described his job to them again then.
“(It) was super hard to explain to them,” he mentioned. “And my dad’s like, ‘Is it like the guy who comes to my office and fixes the printer?’”
But AWS finally grew to become indispensable to net entrepreneurs – and now its future is determined by doing the identical for AI firms.
Amazon is closely concerned with a few of AI’s largest gamers, like OpenAI and Anthropic, investing billions straight, serving to distribute their companies and offering tech for coaching their fashions. It’s additionally developed customized chips for AI duties.
But AWS additionally needs to be very important for all firms via its Bedrock platform, which Amazon says greater than 100,000 firms use to construct their very own AI apps and brokers. Just as AWS’ early merchandise allowed firms to entry storage and computing energy with out making enormous infrastructure investments, Amazon’s newer instruments are making AI fashions extra accessible, the firm says.
Amazon is the largest cloud supplier, placing it in a powerful place to money in on AI-related surges in computing demand. But rivals Microsoft and Google are desperate to catch up.
Amazon’s share of the cloud market dipped from 39% in 2023 to 37.7% in 2024, based on market analysis agency Gartner.
Google’s cloud is at present enticing to startups as a result of it’s barely simpler to make use of and get began with, based on Jacob Colker, managing director of the Seattle-based A12 Incubator, which helps AI startups construct their companies. Plus, Google has a extra beneficiant credit score program for younger firms.
Yet the tide may shift at any second.
“The pace of innovation, obviously, is breakneck in the world of tech, and I think that’s equally true for a lot of the cloud providers,” he mentioned.
Big bets value lots of of billions
Amazon’s monolithic information facilities and hundreds of thousands of miles of fiber optic cables underpin the web. But it’s the choices made inside buildings like the glassy Amazon Reinvent tower in downtown Seattle that assist decide Amazon’s future – and that of hundreds of thousands of different firms, if issues go Amazon’s method.
Within its partitions on an overcast Seattle afternoon, Garman and I focus on considered one of the largest questions Wall Street has for Amazon: the $200 billion it expects to spend on capital expenditures this 12 months associated to AI infrastructure. The quantity was greater than $50 billion increased than analysts’ expectations and the $131.8 billion Amazon spent on property and tools in 2025.
Spending on AI has turn into so massive that market analysis agency Gartner now categorizes firms like Amazon as “digital nation states” since they “control enough land, power, water (and) talent to actually rival countries,” mentioned analyst Nicole Greene.
Where is that cash going?
“This is not a secret, it’s data centers and servers,” Garman mentioned.
The sky-excessive spending has fueled considerations about an AI bubble.
Tech giants insist AI demand is so feverish that they’re scrambling for compute energy. Critics need to know when firms are going to see a return on these investments.
Amazon’s spending spree isn’t its solely eyebrow-elevating transfer not too long ago. The firm slashed roughly 30,000 jobs throughout two rounds of layoffs – one in October and one other in January – to maneuver sooner as AI evolves, it claims.
Amazon previously said AI developments didn’t drive most of the cuts, though CEO Andy Jassy said in June that the firm will want “fewer people” as AI adjustments work. Garman mentioned AI is taking part in an even bigger position in operations, like provide chain planning, managing information heart assets and, after all, software program improvement.
AI coding instruments that permit programmers to construct their very own private workforces of AI brokers are upending the software program trade. Projects that may have taken two to a few years at AWS are actually being finished in a matter of months with small groups, Garman mentioned.
In truth, Garman mentioned AWS’ groups are actually “building at a rate that we haven’t seen for many years.”
Amazon’s strikes might have struck a nerve as a result of they hit on two of the largest AI-driven considerations to emerge over the previous 12 months: the expertise’s influence on jobs and whether or not it’s making a bubble.
But some consultants, like cofounder of the Stanford Institute for Human-Centered AI James Landay, previously told NCS the position AI is taking part in in software program improvement has in some circumstances been overstated. And with each earnings name, analysts appear to have extra questions on when the billions being poured into AI will present up in new merchandise.
Garman is assured these bets will repay.
At a current assembly with round 150 senior expertise leaders, 90% of the attendees raised their arms when requested in the event that they have been both seeing a “solidly positive” return on AI investments or count on to inside the subsequent six months, he mentioned.
“I’m sure they exist,” Garman mentioned about indicators of an AI bubble. “But I have not seen them yet.”
-NCS’s Rhyannon Bartlett-Imadegawa contributed to this report.
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