Seattle, Wash.
Matt Garman helps make your on-line life – your Starbucks order, your Netflix binge, your Pinterest shopping– potential.
As the CEO of Amazon’s cloud computing division, he performs a significant function in deciding the right way to deploy the computing sources wanted to drive the web – a accountability that might 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 grow to be essential for almost any firm that depends on internet-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 essential. The downsizing is rushing up day by 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 stated.
Back when AWS launched, he stated, “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 stated. “A lot of people are going to have to think about how they do work differently.”
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 might 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 advised Bloomberg Businessweek in 2006.
Amazonians nonetheless embrace that pondering in the present day, Jeff Barr, chief evangelist for AWS and a 23-year veteran of the firm, advised NCS.
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Walking by means of the reception space on my strategy 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 flooring the place Garman awaits. As I’m escorted to considered one of his private convention rooms, I see a bodily signal of AWS’s huge attain: a shelf adorned with autographed soccer helmets – the NFL is considered one of AWS’ greatest shoppers, a testomony to how vital it’s grow to be 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 mother and father struggled to know what cloud computing was when he described his job to them again then.
“(It) was super hard to explain to them,” he stated. “And my dad’s like, ‘Is it like the guy who comes to my office and fixes the printer?’”
But AWS finally turned 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 greatest gamers, like OpenAI and Anthropic, investing billions instantly, serving to distribute their companies and offering tech for coaching their fashions. It’s additionally developed customized chips for AI duties.
But AWS additionally desires to be very important for all firms by means of 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 large 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 robust place to money in on AI-related surges in computing demand. But rivals Microsoft and Google are wanting to catch up.
Amazon’s share of the cloud market dipped from 39% in 2023 to 37.7% in 2024, in line with 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, in line with 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.
AWS stated it has offered greater than $8 billion in credit to 350,000 new firms by means of its startup program AWS Activate. It additionally says greater than 65% of billion-dollar startups reported in October by Pitchbook, a database that tracks startup funding and different monetary information, are constructing on AWS.
And Colker stated the tide might 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 stated.
Amazon’s monolithic information facilities and thousands and 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 thousands and thousands of different firms, if issues go Amazon’s manner.
Within its partitions on an overcast Seattle afternoon, Garman and I focus on considered one of the greatest 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 larger than analysts’ expectations and the $131.8 billion Amazon spent on property and tools in 2025.
Spending on AI has grow to be so giant 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,” stated analyst Nicole Greene.
Where is that cash going?
“This is not a secret, it’s data centers and servers,” Garman stated.
The sky-high spending has fueled issues 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-raising transfer lately. The firm slashed roughly 30,000 jobs throughout two rounds of layoffs – one in October and one other in January – to maneuver quicker 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 stated AI is enjoying a much bigger function in operations, like provide chain planning, managing information middle sources and, in fact, 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 will have taken two to a few years at AWS are actually being carried out in a matter of months with small groups, Garman stated.
In truth, Garman stated AWS’ groups are actually “building at a rate that we haven’t seen for many years.”
Amazon’s strikes could have struck a nerve as a result of they hit on two of the greatest AI-driven issues to emerge over the previous 12 months: the expertise’s affect on jobs and whether or not it’s making a bubble.
But some specialists, like cofounder of the Stanford Institute for Human-Centered AI James Landay, previously told NCS the function AI is enjoying 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 fingers when requested in the event that they had been both seeing a “solidly positive” return on AI investments or count on to inside the subsequent six months, he stated.
“I’m sure they exist,” Garman stated about indicators of an AI bubble. “But I have not seen them yet.”
-NCS’s Rhyannon Bartlett-Imadegawa contributed to this report.