Arm
Appearances
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
support for this show comes from arm have you ever thought about the technology that makes this podcast possible to listen to on your phone in your car or on your laptop and then there's the data centers that make it all work one company is at the heart of it all it's the same company that powered the smartphone revolution and is helping define the ai revolution that company is called arm
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
Arm designs compute platforms for the biggest companies in the world so they can create silicon and solutions to power global technology. Arm is proudly NASDAQ-listed and became a NASDAQ 100 company within a year of its IPO. Arm touches nearly 100% of the globally connected population. 99% of smartphones are built on Arm. Major clouds run on Arm as well as all major mobile and PC apps.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
Now, ARM's engineers are tackling the insatiable demand for compute and power efficiency that AI is creating. AI-enabled ARM CPUs are able to provide the compute platform for the global AI revolution in the years to come. But for now, relax and enjoy this podcast. It's very likely running on your own ARM-powered device. Visit arm.com slash discover to learn more.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
Support for Decoder comes from Life360. As your kids get older, it's pretty common that they want you to start doing less and less for them. They want to get themselves to school or even carpool to practice. And while it can be a scary time, it can also be a wonderful moment for them to stretch their wings. But of course, you also want to make sure they stay safe.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
For that, you might want to try Life360, a family connection and safety app that makes it easy to keep track of your family members' locations in real time. Life 360 notifications let you know when your kids arrive or leave a location like school, practice, a friend's house, or the bus stop.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
And with a tile from Life 360, you can easily attach and track items like backpacks, duffel bags, or even a pet's collar, all to help alleviate the mental load of managing a busy family. Family-proof your family with Life 360's Tile trackers. Visit Tile.com today and use code DECODER to get 15% off. That's Tile.com code DECODER. Support for this podcast comes from Huntress. Thank you.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
When threats arise or issues occur, their team of seasoned cyber experts is ready 24 hours a day, 365 days a year for support. They provide real-time protection for endpoints, identities and employees, all from a single dashboard. Their cutting-edge solutions are backed by experts who monitor, investigate and respond to threats with unmatched precision.
Decoder with Nilay Patel
The toxic transformation of Warcraft maker Blizzard
Now you can bring enterprise-level expertise without needing a massive IT department. Huntress can empower your business as they have done for over 125,000 other businesses. Let them handle the hackers so you can focus on what you do best. Visit huntress.com slash decoder to start a free trial or learn more.
Decoder with Nilay Patel
Airbnb CEO Brian Chesky on what founder mode really means
support for this show comes from arm have you ever thought about the technology that makes this podcast possible to listen to on your phone in your car or on your laptop and then there's the data centers that make it all work one company is at the heart of it all it's the same company that powered the smartphone revolution and is helping define the ai revolution that company is called arm
Decoder with Nilay Patel
Airbnb CEO Brian Chesky on what founder mode really means
Arm designs compute platforms for the biggest companies in the world so they can create silicon and solutions to power global technology. Arm is proudly NASDAQ listed and became a NASDAQ 100 company within a year of its IPO. Arm touches nearly 100% of the globally connected population. 99% of smartphones are built on Arm. Major clouds run on Arm as well as all major mobile and PC apps.
Decoder with Nilay Patel
Airbnb CEO Brian Chesky on what founder mode really means
Now, ARM's engineers are tackling the insatiable demand for compute and power efficiency that AI is creating. AI-enabled ARM CPUs are able to provide the compute platform for the global AI revolution in the years to come. But for now, relax and enjoy this podcast. It's very likely running on your own ARM-powered device. Visit arm.com slash discover to learn more.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
Support for this show comes from Arm. Have you ever thought about the technology that makes this podcast possible to listen to on your phone, in your car, or on your laptop? And then there's the data centers that make it all work. One company is at the heart of it all. It's the same company that powered the smartphone revolution and is helping define the AI revolution. That company is called Arm.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
arm designs compute platforms for the biggest companies in the world so they can create silicon and solutions to power global technology arm is proudly nasdaq listed and became a nasdaq 100 company within a year of its ipo arm touches nearly 100 of the globally connected population 99 of smartphones are built on arm major clouds run on arm as well as all major mobile and pc apps
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
Now, ARM's engineers are tackling the insatiable demand for compute and power efficiency that AI is creating. AI-enabled ARM CPUs are able to provide the compute platform for the global AI revolution in the years to come. But for now, relax and enjoy this podcast. It's very likely running on your own ARM-powered device. Visit arm.com slash discover to learn more.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
Support for this podcast comes from Huntress. If you're a small business owner, the threat of hackers isn't just a threat, it can affect your livelihood. Small businesses are easy targets for hackers and Huntress wants to give businesses the tools to help. Huntress is where fully managed cybersecurity meets human expertise.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
They offer a revolutionary approach to managed security that isn't all about tech. It's about real people providing real defense. When threats arise or issues occur, their team of seasoned cyber experts is ready 24 hours a day, 365 days a year for support. They provide real-time protection for endpoints, identities, and employees, all from a single dashboard.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
Their cutting-edge solutions are backed by experts who monitor, investigate, and respond to threats with unmatched precision. Now you can bring enterprise-level expertise without needing a massive IT department. Huntress can empower your business as they have done for over 125,000 other businesses. Let them handle the hackers so you can focus on what you do best.
Decoder with Nilay Patel
Arc creator Josh Miller on why you need a better browser than Chrome
Visit huntress.com slash decoder to start a free trial or learn more.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Some of it is also, you know, I think if you think about the advertising that we do with together with some of the sports networks, whether it's NFL or F1 or others, a lot of what that does is to help connect the dots. You may know that AWS exists, but helping see that like in a,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
context that you understand, which is football or F1 or Bundesliga or whatever the sport is, how we're helping do analytics for that sport, it really is one of those things that helps customers connect the dots.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so it's not just an ad that says, hey, AWS exists, but it is connecting those dots that says, okay, if we're able to do analytics that can see how fast a football player can run or see what the chances that an F1 car can pass, It really helps customers just connect the dots as to where we might be able to help their business too.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And it also opens the door for us to do that next deep dive where we can really dive in and understand that. And we find that that connection point is actually quite valuable, even if people know that AWS exists already.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Well, Verizon was a little bit different. It was actually a partnership with us where we were talking about potentially selling some of that compute space together at the edge. And I think that technology is probably a little bit ahead. And I still think that there's an interesting eventual win there.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But I think the idea was a little bit of ahead of the technology of like really low latency compute at the edge, mostly because a lot of that latency was taken up just in the network. And so it's hard to get that benefit of a small latency gap. But I think a lot of... Look, if you go back 15 years, many companies were thinking that they would just go offer the cloud.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It looked like it was easy, right? And then they said, oh, it's just a hosting thing. I have a data center. I can sell that. And so I think most companies today, outside of the handful of three, four companies that are really in the space, don't really think that they can go provide a real cloud offering. It's hard.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And particularly, there's niche offerings that you can offer in particular slices, but I think... increasingly we view and together we view this as a partnership opportunity where we can go add value together. I think our partnership with Verizon is great. We look at how we can go add value together.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Over time, we'd love for more of the broader network because you look globally and you're starting to see other telcos start to lean into this model of maybe more of the, the core can be run in AWS. That part is, okay, that can be run in central data centers and so we're starting to see more core. Then you think about, can the RAN be run in AWS? Maybe, yeah, it can.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Actually, they're starting to see that piece in there. I think it'll be a transition over time. But I do think that as we add more value there,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
and show that we can give programmability to their networks, that we can show that there's scale to the networks, that you can actually show benefits on patching and other things like that where there's a lot more flexibility there, I think you'll see more and more telcos leaning into cloud-based deployments.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Well, in some ways, it's a much stronger carrot. If the pitch is, hey, run the exact same thing that you're doing, but do it a little bit more efficiently and a little bit less expensively, that is less of a value proposition than if you can do something that hasn't been possible before.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so I think that's why many of the workloads that you've seen move to the cloud already are the super scalable ones or the ones where they need lots of compute or the ones where They have a really large footprint because they see the winds are enormous for those type of customers.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
For a server running in a basement of a hospital, maybe they can save a little bit of money or maybe they can save a little bit of IT work or whatever, but the value proposition may not be there unless we can really deliver a lot of value. you're not going to be able to get a lot of the value that's promised from AI from a server running in your basement. It's just not possible.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
The technology won't be there, the hardware won't be there, the models won't live there, etc. In many ways, I think it's a tailwind to that cloud migration because we see with customers, forget proof of concepts. You can run a proof of concept anywhere and I think we've the world has proven over the last couple of years, you can run lots and lots and lots of proof of concepts.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But as soon as you start to think about production integrating into your production data, you actually have to have that data in the Cloud too, so that the models can interact with that data and you can actually have it as part of your system. I do think that that is going to be a tailwind over the next couple of years as people really want to have these agentic systems.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
They really want to have their data in a secure environment, but integrated into an AI workflow. You can't orchestrate an AI workflow pointing it at a mainframe. It's not going to be possible. If you have the data going back and forth to some model, the security and control of making sure that that IP stays with you is risky too.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But if you move the whole data into a secure Cloud environment, when you have a modern data lake that has all your data, your application is working there,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
and you're co-located with where the model can run, and all the controls can run, and the guardrails can run, and you can have a RAG index that's nearby too that takes advantage of all that data, that's when you can really start integrating it into your actually production applications, and that's where you're going to see a lot of the wins that are really meaningful, not just like a cool, hey, that's neat that I can have a chatbot, but really integrated into how your workflows change and how you can do business changes.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so I have seen early signs that that is, you know, to your question on organization, they're very complementary. It's not A or B. It is kind of all pushing in the same place. And so we'll have to have different capabilities. We'll have to have different motions to help all of that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But I do think that that move of getting your data into a cloud world, it's kind of a necessary condition to having future really, really successful, deeply integrated AI, I think, into your business processes.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
What do you mean? Say more about that. Where's our org structure?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I will say that an org structure, number one, it's a living thing. So whatever I tell you today may not be true tomorrow. And I think you have to be agile there. But broadly, how we think about structuring our teams, I think is pretty well documented in the industry around Amazon, which is we want single-threaded teams that can focus on a particular problem and move fast.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
What that means is you really want a team who can own a problem and not be matrixed across 10 different things where they have to coordinate a bunch. In some ways, I think about it like a computer program, where when you have a big monolithic computer program, it's very efficient as long as that monolithic computer program is small.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
As it gets bigger and then you have multiple people working on that program, then you get a mainframe and it's very slow and you can't iterate on it and you can't move fast. So what you do is you decouple. You then build services and they talk to each other through well-defined APIs. Then you continue to decouple those programs, you continue to refactor.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
That's how you build modern technology systems. You can think about containers as the current way of doing that, which is really small, independently running systems that can talk to each other through APIs. Now, if you think about org structure, it's not that dissimilar from that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
If you think about how do you have teams that can run really fast and there is going to be coordination, but what you want to do is minimize that coordination tax as much as possible. So if you have a well-defined API between them effectively, which is like I build a service over here, you build a service over here, we can go innovate.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Occasionally, our teams will get together and make sure that we broadly know what our vision is. We want to know what the thing is that we're running towards. But then I can go and in particular, my service or my organization or whatever it is or my feature can run independently and not have to
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
have a coordination like if high-level, if the EC2 team and the S3 team had to talk every time they were going to go launch a feature to make sure it worked together, we would move really, really slow. But we don't and so the teams can move really fast and then we make sure like we have, it's part of the leadership and the product leadership team to get together and say, okay,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
We think going after this space is super important. And some of that is customers are going to want this use case. And so broadly, we're going to have to go after this thing. But we can still then have the teams go out and run fast. That is the organizing principle. And then there's other parts of the organization where we have teams that run kind of the data centers and other global.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And some of those are separate teams. But if you think about the product and organizing around the product and technology, that's how we think about it.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Just like that. Go through it. What are the services?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
There are 200 different services. I'm not going to go through all of them, but that is it. We'll continually refactor and we think about them. From a technology point of view, we think about a compute service. You can think about EC2 and then you can think about EC2 networking,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
and then you can think about how do we make sure that it's optimized around containers and then all the way down at the bottom you think about you know how do we have teams of of 10 to 20 people that are are focused on a sub component of that that that is is fully separable and so you know we have of thousands of developers that are all organized on that principle sometimes we'll move them around organizationally but it's not really the org structure like the key piece is that really ownership at the bottom the top part is just how are you efficient on management and how do you make sure that you're
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
managing the teams well and doing that high-level coordination bit, and that's actually where you move around. But at the core, those teams are pretty solid and as you find a new opportunity, you spin up a new team that goes after it and figure out where does it make the most sense in org structure.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But at the core, that is the organizing principle is we have those small teams and we continue to drive them. So that's it. And then we organize our sales and go-to-market teams and marketing teams kind of separate from that. But from the core product side, that's how we think about it. And it works well for us.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think the positives are, you know, look, there's pros and cons to any organizational structure. From our side, the pros significantly outweigh the cons. From the cons side, sometimes, and you've heard, I'm sure you've heard this criticism and feedback of AWS, which is sometimes it seems like it's not perfectly consistent or, you know, this XYZ feature is not,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
supported across every single service yet or things like that. That is the downside of that organizational structure is your fit and finish across every single service is not always perfect, and sometimes it takes a little while to catch up to all of those things, which is expected as you're having a thousand different teams run at different paces on different things.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But the trade-off is we get to move really fast, we're super agile, we can respond to customer feedback really quickly. I think that is the other secret to that, that it's not just an organizing principle, but it is also you teach those teams to really listen to the customer. Truly, I'm sure every leader you have on here says they listen to their customers.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Amazon does a really good job of actually internalizing that all the way down to every individual contributor. And we think about how do we go solve customer problems? And when you're small and you're agile and you can make decisions, you can actually go solve customer problems really fast in your area. Those things play on each other and are helpful.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Technically an intern when AWS, before AWS launched in 2005.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It was a very different business back in the day. I was the product manager for all of AWS. So you still are, is what you're saying. Yeah, exactly. I have the same job now. And I kid. There was a couple other product managers at the time, too. But the frustrations now are then and now are also similar. Different. It's obviously a different scale that we're operating at.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But one of the things I was frustrated at back in 2006 was I knew a ton of things that we needed to go deliver for our customers. Like, I just had a huge list. And it was all about prioritizing that list, but I wished that we could deliver them faster. Yeah. and do more. Even at the scale of AWS's today, that's still true.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I wish we could do more and do it faster, and that's part of why I focus on that organizing principle of how do you make sure that you can get out of the way of the teams to move fast. My job today is a little bit more of how do I remove those barriers and help teams move fast, but that's it.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think it's a lot of, we want to make sure that we're innovating, we want to make sure that we're leaning ahead. You know, some of the challenges we have today are different than we had in 2006. In 2006, we had to answer the question of, like, why would a bookseller ever run my computers? And that question we get less and less today, actually. I don't think I've gotten that one for a while.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But now we have to deal with scale, and you have to think about enterprise requirements, and you think about how do I meet auto requirements, and how do we support governments, and how do we think about scale, and how do we make sure that we have enough electricity in the world, and all of those kind of questions.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But all good problems for us to solve so that we can take them on so that customers don't have to.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Well, part of my job is to make the one-way door decisions. I think that framework is, it's a useful one to think about. And just to clarify in case you're not aware of it, it largely is that's how you go fast, is you try to define what are those decisions that are, they can be important decisions, by the way.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think sometimes misunderstood, that's like, what are the important decisions and not important decisions? It's not that, it's you want the people that are owning those teams at the edges of the organization. They really own those products to make important decisions because they know best about their product.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But there are also decisions that could be undone if we decide that it wasn't the right thing to do. Then the bigger, I'm going to go invest a billion dollars or I'm going to launch a new service that is hard to pull back or is painful to pull back. Those are the one-way door decisions that I think we want to have a little bit more inspection on.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Even those though, I think we're trying to figure out how do we make those faster too and enable a broader swath of people to make those. You asked how I make decisions. I think for better or worse, my take is I am rarely, if ever, the expert on any particular subject that we're working on.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And if we're working on compute, if we're working on storage, if we're talking about hypervisors, if we're talking about sales compensation, if we're talking about
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
you know, power contracts that we're signing, if we're talking about, you know, whatever it is across technology, if we're talking about go to market efforts, if we're talking about marketing, I am almost never the expert in the room on that. And so I make sure that I listen and leave space for those experts that spend all of their day thinking about that to weigh in as to how they've come up with
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
their recommendation, how they think about what we should do.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Then the part that I bring to that is to one, take a view of a non-expert and ask some questions and understand how they're thinking about the problem, and then also help connect the dots to the other part of the organization that they may not have visibility into and understand if there's trade-offs that they've maybe not thought about because
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
you know, they're making a marketing decision and didn't know about a new product that we were delivering over there. And so I try to make sure that as an organization, we've connected those dots and then ask the right sets of questions. And then if, look, if there's a tiebreaker decision, I'll have to do it so that we can move fast.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Because I don't, I think the place we don't want to be in is sit there and just debate forever. At some point, you need a tiebreaker decision. And that's kind of what I view my job as doing as well.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's a good question. I'll start with, I believe that AI is incredibly transformational, whether you call it a platform shift or not, we can get to in a second. But I think it's an incredibly transformational technology that more than kind of, you know, look, these things come around every decade or so.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think it is one of the technologies that has the ability to be completely transformational, whether it's transforming industries, transforming companies, transforming jobs, transforming workloads, like I think, or workflows. I think it has a real potential to have a material impact on every single piece of how we think about work and life and user experiences and the like.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I'm a full believer that that is true. I think there's a timeline question. Is that going to be in the next 12 months or the next 24 months or the next five years? I do think it is going to happen and it's going to have a real change on a lot of pieces of business. Platform shift is an interesting question because platform assumes that AI is not yet a platform.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think that that is a more open question. It's a huge enabling technology. And whether you build on that AI or that AI is just kind of embedded in everything that you build with and is a core component of what you build with and how you think about it's a tool that is really meaningful and impactful, I think it remains to be seen as to exactly what that means.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But it is a transformational technology.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Hmm. I don't know if it's really like either of those.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's not like that. I don't know if it's like an iPhone either, though. It may be more akin to the internet disruption. That's what I'm saying. I don't know if the internet is a platform per se. It's like a... a shift as to how you would deliver an application.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
So maybe it's platform, but I think it's more akin to like that where there will be fundamental shifts into how you deliver products and offerings and services and do your work on a daily basis. So the Internet has been hugely transformational on how you do your work on a daily basis. You used to sit there on a typewriter or, I don't know, write memos or do whatever.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And now you're on a computer all day and you're interacting on either SaaS applications or you're emailing people or there's just a fundamental connectivity. And I do think that AI is more akin to something like that, where it kind of has that fundamental shift into how you're going to get work done.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Well, number one, it's a literally impossible question to ask because there's no definition of what AGI is. So when you reach it is also an impossible definition because, I don't know, you can't define when you reach an undefined thing. What I would say is I think that it's just a continuum, and I think that AI...
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
we'll call it AI inference, that the ability to go do work is going to continue to get more capable over time. I think that there is a long road of this to get much more capable over time, and it's going to get much less expensive to run over time, which I think then explodes the number of ways in which people will find ways to make it useful.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
whether it's running agents, whether it's doing other workflows, whether it's long-running reasoning tasks. I think there's a whole host of things that you can imagine. There's just a continuum of where eventually the things land and where you're able to ask the computers to do more for you at lower costs. I think hardware platforms are going to play a big part of that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think software algorithms are going to play a big part of that, and you're going to need both of those. I don't know when you reach AGI, I don't know what that means, but I do think that the next generation of compute, it's going to deliver somewhere between and whatever.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
The current generation that we just announced with Tranium 2 and eventually with Blackwells and GB200s, I think will give customers a 2-4x boost in compute capability per dollar. We announced Tranium 3, which will give another 2x boost to compute by the end of 2025. And so that is going to help that you will continue to get more and more and you're going to be able to do bigger and bigger things.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And you're absolutely going to need algorithmic improvements as well, which many of the teams, ours included, are very focused on doing.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Again, they've- They've defined AGI down, to be clear, but they're going to say it pretty soon. I understand there are contractual terms that they're working through, but they have some motivation of reasons to do that, from my understandings. It's not about declaring anything. It is just, let's go figure out what you as a customer.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
This is again, I am less interested in puffery in the press and more interested in how I can help customers achieve actual outcomes. It's fine. There can be marketing statements, there can be like, I have the biggest compute cluster in the world, I have AGI.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
At some point, I want to help a bank figure out how they can reduce the amount of fraud that they're seeing or improve the speed at which they can approve loans or whatever the thing is that actually goes and helps a business. I want to help biotech find cancer cures faster and better and figure out how they can significantly shrink demand. and or improve the efficacy of what they find.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Like, and so those to me are interesting and useful outcomes. And so if you tell me like, hey, can you help a customer find cures for cancer faster? Awesome. Like that is a thing that I'm focused on. Whether it was that AGI that did or not, I don't know. It's like you, I'm not interested in that per se. It's
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Thank you. Thanks for having me.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I'm more interested in, can I actually help our customers deliver value to their businesses? And a little bit less on the like, can I like have a stake in the ground around marketing? Because I think at the end of the day, customers actually care about that first one, not that second one.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Thanks to Amazon Pharmacy and Amazon One Medical, healthcare just got less painful.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I don't think you can pick one or the other. The world is going to deliver more capable models and they are expensive and they require a lot of compute and it's an area of investment for us and it's an investment for many of our customers. I think it's the right area of investment for a lot of those because I do think
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You don't get more capable smaller models if you don't have the large model to start with. That is just how it works. You can't come out with something that's a really powerful small model if you didn't also build a frontier model or start with frontier model. You have to have those large frontier models and I think we're going to need those to be more capable.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
and there's a lot of innovation in inference and how you can drive costs down. Some of that is a systems problem, some of that is a hardware problem, some of that is algorithmic problem. You can think about model distillation.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
There's a whole bunch of techniques that you can do to get these smaller, faster inference models, which I think are going to be hugely impactful and important to delivering real value to enterprises. I think you go talk to customers now, And they are no longer interested in bright, shiny AI proof of concepts. They want something with real ROI associated with it.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And the way you deliver great ROI is you either have more value and or less cost. And I think both of those are going to be important to keep raising the level of ROI that you can deliver on. And so if, as we think, there is this massive ability to transform organizations, you have to keep increasing what models can do and decreasing how much they can cost.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so I don't see how you pick one of those. I think you have to do both.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Yeah. Well, as I'll tell you, in my keynote in reInvent, I talked about another thing that I like to do in Amazon and we do here, which is we refuse a thing that we call the tyranny of the or, which is forcing someone to pick A or B stifles innovation because it means that you don't go out and invent how to do A and B. And so you can't pick. I'm telling you, it is not an A or a B chance.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's an A and B. And we have to push our teams to figure out how to do both, which is enable bigger training. And we have to lower the cost of that, by the way. It can't just keep scaling linearly, which is all part of the silicon investments that we're making and networking and things like that, which is how do you make the cost to train these really large models lower?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
lower so that you can train bigger models. And I think we have to make that investment. We are making that investment. It's a huge area of opportunity for us because today it's too expensive to continue to ramp at the rates of the cost of the infrastructure. And so that's a big part of Tranium is investing in how do you get the cost down for training.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I'm ready for it. Shoot. Fire away. I'm happy to go wherever you want.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think the inference side has to drive costs down too, which I think is incredibly important for the adoption side of it. So you have to do both. They won't work if you just do one side.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's less a competition and more an addition of choice because I don't think that it is GPUs.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
That's right. It turns out we've been making chips now for over a decade. We've been making silicon chips, our own custom silicon for more than a decade. And so we have one of the most experienced teams in the industry doing this. And so it's not a new thing.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's not like we dove in here and said, we have no idea what we're doing, which is, by the way, some of those others are learning it for the first time, not NVIDIAs and, of course, AMDs. And Google's been doing it for a little while, too. I think Microsoft is pretty new to this space. But we think that that is a big advantage for us is we understand how to do this at scale.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
We understand how to do it in the cloud. I think we have some advantages in that we don't have to do it for a broad set of customers. We have to deploy our chips in exactly one environment. We have to deploy them in an AWS data center. We have to deploy them in exactly one server. We don't have to support a whole OEM infrastructure.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
We don't have to support a set of different drivers and a bunch of different things. It's just in our environment, and we know exactly what that's going to look like. And we think it's a choice. We don't think that it has to meet every single use case for every single customer. We think that NVIDIA GPUs and AMD GPUs and others are going to be super interesting. They have good platforms.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Both of them have very good teams that are executing really, really well. And I think they will continue to do that. I don't see any reason why they wouldn't. And we plan to be a great partner of theirs for a really long time and support that and offer it to customers for when it's the right technology choice for their use case.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
and we think that we can offer interesting choice and we've done it with graviton we've proven that we can launch a processor at broad scale that is very useful for a set of workloads a lot of broad set of workloads for our customers and it doesn't in graviton's case it doesn't mean we don't buy a ton of intel and amd chips and offer those to customers we of course do and those are growing businesses for us as well it's just more choice and it we think that choice
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
makes AWS a more attractive platform for customers because they have more choices than they do other places. And so that additional choice is nice. And that means part of that choice is we want to really lean in and make sure it's the best place to run NVIDIA GPUs and AMD and Intel and others. And so we think it's a big opportunity for us.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And if you do think, which we do, that AI is going to disrupt all of those different industries, it's a massive opportunity where it's not one player is going to be the only compute platform that all of those things run in over time. And we think that We have an opportunity to build some of that and provide differentiated choice for customers that choose to run AWS.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
i think people like to talk about scaling laws because again it sounds fun to talk about but i think that it probably just means there has to be more levels of invention like i think if you look over in any technology ramp you kind of see a uh one particular technique ramping like this and then it slows down and then somebody says oh how about you try this and then it goes back up again and then you try something else and and so there's going to have to be software and all algorithmic changes i think it's not a blind
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
like dump more data and more compute and close your eyes and you'll get a bigger model next year. You're going to have to have smart people looking at it and driving it and figuring out new ways to help that. But that doesn't mean that you've hit a limit. I think it's just, you're going to have to keep innovating on different ways.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Yeah. Netflix is a great customer of ours. Absolutely.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And you think about, again, think about number one, how long, and it was longer than a decade that people were saying that we were hitting Moore's law scaling limits. That was just, you know, can you take 17 nanometers and make it 15 nanometers and 13 nanometers? And you're saying, like, okay, there's going to be a limit.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Number one, they had to figure out technology to get past a couple of those, right? I remember somewhere around 10 nanometers, people were like, I don't think you can get past this. And now we're building three nanometer chips, right? And so you keep getting smaller because there's new technologies in there.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You had to figure out how you deal with interference, and you had to think about how you think about actually stacking the memory and different structures of the chips and other things like that. But you work through those. And In the meantime, you kind of figured out how to do more compute on an accelerator like a GPU that then gave you, you know, a huge step change in compute.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so no longer people are worried about, did you, you know, are we hitting the limits of what a 17 nanometer Intel chip from 10 years ago was doing, right? Now we're orders of magnitude more compute than that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
: They figured out parts of that. I mean, they figured out the layout chip. And by the way, CC and the team did a fantastic job of figuring it out. So yes, but the world figures it out, right?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I was hoping Mike would win, honestly. So was I. As I think probably most were, but that's okay. It was fun to see him out there.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think, I mean, they're making lots of investments and I think they're scaling and I think others are looking to catch up in that space too. And they have a great lead. And this is also true in technology and has been for a long time is that somebody jumps ahead and figures out, gets a lead and it's a benefit for them for a while and others catch up.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think you can look at some of the HBM memory and some of those other fabs that are coming up and they're catching up and finding other new ways to do that. And there will be other inventions that leapfrog over time. But obviously fabs are hugely capital intensive investments and others like that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so I am sure that others will eventually find new and different ways to innovate around that too. It has always been true in technology.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I wouldn't have anything to announce there, but we partner with lots of folks. We partner with Samsung. We partner with Intel. We partner with others that have their own fabs as well and buy lots of other stuff from them, from memory to CPUs and other things like that. So we buy parts from lots of different fabs around the world.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Yes, it is. We've made significant investments there. And it's a range of things, by the way. It's a portfolio. And this is not a new plan for us. Over the last five years, we have commissioned more renewable power projects than... Each year for the last five years, we've commissioned more than any company in the world.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And that's bringing on new power into the grids, whether they're new solar farms or the new wind farms, and now we're adding nuclear to that. And so it's just a portfolio of that. I think the world is going to need more carbon-free energy. And compute and data centers are a big portion of that. And we're pushing hard to make sure that the world has enough sources of that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I do think that nuclear will be an important component of that plan over the next couple of decades. And so we're excited about small modular reactors. I think that it's a technology that's a little ways away, by the way. It's not solved for the next couple of years. Past 2030 and beyond, I think it could be a very important component.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
One, because you can actually put it near where you need the power to be. Another of the bottlenecks that we run into is around transmission. It's not just power generation, but it's transmission. So you can have a solar farm out in the desert, but if you don't have transmission to get it to where your data centers are, then it doesn't do a lot of good.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so those are both problems that need to be solved. And it's not just data centers. It's electric cars. It's electrification of all of our businesses. There's a bunch of these things that are going to need to happen. And so I think nuclear is going to be an important part of that, both small modular reactors. And I think the world's going to have to build more
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
of these large, you know, industrial scale nuclear plants as well. I think a lot of people's heads are in the like, you know, that was scary back in the 50s when the technology wasn't as safe today. It's a very safe, scalable technology, but it's, you know, it's something that we have to keep spending and scaling.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Yeah. Well, AWS is a nice profitable business for Amazon.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You've got the margin to spend on it, but at some point it has to return. And for customers, they're increasingly looking at it this way. It's not just us. And I said this a little bit ago. If you talk to customers, they are very focused on how do they have ROI-positive AI projects.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think the Cloud has already proven across a broad swath of industries to be ROI positive for many different industries. I think we're moving your data to the Cloud, your compute to the Cloud, you gain agility. That I think we've proven that we can deliver great ROI for customers in moving to the Cloud broadly, broad speaking and taking IAS side.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
What we're increasingly seeing customers say is, I want to see the ROI of these AI projects. I do think that that is an important shift where it's not just the cool, it's not just the glam, the shiny object factor. It is, how do I make sure this makes sense? We are spending time with customers thinking about that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
How do you work through the use cases that are enabled today that can deliver real value? Some of those are are broadly reported around things like modernizing your contact center and we think Connect is a great offering for customers to do that. We're actually seeing huge number of customers move to Connect in a Cloud contact center to take advantage of any of those AI capabilities.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You see some of that in optimizing some of your back-office projects. And I think increasingly as the agentic workflows really get much more powerful and as we think about collaborative agentic workflows and longer running agentic workflows, you're going to see more and more value come up through these. And as the models get more capable, you're going to see more value coming up through those.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so it's on us, it's incumbent on us to make sure that these are very profitable for end customers to go and implement.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's not the right characterization of it. So there's a couple of things I would say is number one is AWS was never about excess capacity about Amazon. Just like math doesn't work, right? You can imagine, like I've heard that narrative. It sounds nice.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And as soon as Christmas time comes around, if I have to take Netflix's servers away so that we can support retail traffic, like that doesn't really work as a business. So it was never like that. That was never the idea, nor the intent, nor the goal of AWS. We built the businesses from scratch. They weren't reusing Amazon components. We learned from that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
They're an incredible early customer to learn from the components that they would need, but we built them from the ground up to support a broad range of customers. And so AWS itself was a big investment by Amazon to go after a broad new business. As you think about now, we had Amazon as a big customer of ours, for sure.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And they were a super helpful customer for us to learn about what large enterprises would need from services like AWS and continue to be. I think AI is not that dissimilar. Amazon needs AI. You mentioned that you watched my reInvent keynote. Andy was up there for 25 minutes talking about all of the cool things that the rest of Amazon is doing with regards to AI.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You got to ask Ted about that. The piece I think about that where they were stressed was they do run their own CDN. And so you can ask Ted about that, too. But that's the part of it that was really stressed is the CDN part of that is really the part that they and they have Netflix has their own homegrown CDN that they use. And that's the part that I think was stressed.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You're talking about Rufus or talking about how we're thinking about our supply chain and fulfillment centers and across the whole scope of an Alexa. That business desperately needs AI capabilities to
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
again reimagine our business get more efficiencies deliver new experiences for customers like we are amazon is customer number one for a bunch of these capabilities and so if aws can build them and amazon can take advantage of them that's fantastic and both of those things are true So yes, it's a big forward investment, but we also have Amazon still using these.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And we're in a different place now. When we started in 2006, we had zero external customers. We now have a million external customers or multiple millions of external customers, right? And so that is a huge customer base that is ready and willing and excited to buy and use the products that we have.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so that investment, it is forward investment, but you also have a really big base that you can amortize across and go offer it to, which makes that investment thesis a little bit easier to get over.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think it's ROI positive. Well, it depends what you mean by ROI positive. I think there's a lot of investment in the world.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
If you think globally, I think it's ROI positive now. I think the question is when does it become more evenly distributed? Look, I think the hardest question of that, honestly, is for the model. I think that's the single hardest question.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I actually think it very quickly today, or if not today, very soon, is going to be ROI positive for the broad swath of customers using AI and building it in, right? Banks and insurance companies and pharmaceuticals and others like that. You can make that ROI positive story today, and I think it will continue to get better.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think for infrastructure providers like NVIDIA, of course, it's very ROI positive. The question is when does the folks that are making the most huge investments are the ones that are building foundational models from a software perspective and then reselling those foundational models? It's a good question.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I don't know the answer to that of when that investment fully pays off for an open AI or an anthropic or a I think Amazon and Google probably have a different math of when you can make those pay off because you get kind of an internal usage of them from your own use. I don't know that, but there's a lot of smart people continuing to put investment in a broad swath of AI companies.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And you have to believe, which we do, that there is a massive economic benefit from many of these AI capabilities that are orders of magnitude bigger. And I do think it really does play into that math equation. As inference gets cheaper and more capable, that there are multiple orders of magnitude more inference to be done.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And that is kind of when it ultimately starts to pay off, I think, for a lot of those model providers and in a huge, massive way.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
So I don't know the details of exactly where they were running into barriers, but it wasn't in their AWS infrastructure. It was in the Netflix controlled part of their infrastructure. Yeah.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
That's a good question. I don't know that there was any one product that I got excited about. The first product that I ever used that said, hey, I think this is real is just like everybody else. I think ChatGPT was just a transformational product. It was a great UI and it really unlocked for everyone what was possible.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
The first time that I really realized that this was going to take off, and we were making investments internally, but I think we were hopeful that they would get there. I think that's the first one that I used that I really understood. Now it's hard because I use thousands of them, and I think all of them are really cool and
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think there's a lot of startups from people that are building AI products that are making new proteins, which is incredible, to folks like Perplexity that are making search engines that are much more interesting, to contact centers, to banking applications. There's a whole host of them now that are incredible. I think Amazon makes some, and many of our partners make many.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
So those are all incredible. But it really was just like the rest of the world. I think ChatGPT was the first one that really kind of helped solidify it.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Great. Thanks for having me.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
is and i think in particular there's a couple things around that that are challenging right by the way it's like it's a super hard thing that they did number one is their first time doing a lot of big like scaled live stream like that and so the first time is actually what's hard you know there are other people have done that before we will stream thursday night football and other places like that that have figured out how to do things like that but it's not the first time right and so it's the i am very i'm sure that the next time i think they have a christmas day game they'll probably work out some of those kinks and figure that piece out and so
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
The first time you do it, you'll find those bottlenecks. It's true about any compute system where you have an order of magnitude more and they obviously have shows that have streamed more, but they're spread across more time. It's this single spike up where everybody comes in a 30-minute window. If it's outside of what you plan for, if they plan for
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I don't know what their numbers were, but 150 million and they got 180 million. It was outside of what I think they thought their upper limit was. And we've seen this before in AWS and we've seen this in Amazon. The first time we probably did Prime Day, we probably had issues across that too of just people hitting the website and other things.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
So the first time you do events like this, it's a learning process. And so I think it's probably overstating to say they had to re-architect the whole internet. But it really is that key spike where a lot of applications are just not, particularly when you own the infrastructure,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
This is one of the benefits of the Cloud, by the way, is you get to ride on the law of large numbers where any one spike doesn't overwhelm everything else. Netflix obviously has a huge number of customers. My guess is they'll be much more prepared for next time. But it's a good learning for anybody, even at much smaller scale, that when you're planning on an event,
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
that has the potential to be materially more than your average baseline, there's always risks of that there's some scaling factor that you don't anticipate. So it's not a surprising problem to me. We've seen it over and over again, and it's part of one of those problems that the cloud helps to solve.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But even in the cloud, planning is required and you have to think about how you scale ahead of it and things like that.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I was texting back and forth to our support team to make sure we were supporting the Netflix team as much as possible, yes.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
More back in the day when we were scaling and learning back in 2007 and 2008 where we kind of were learning how to scale there. I think we, today, we're often at a broad scale and so everything, lots of things on the internet and lots of things around the world run on AWS and And we usually run pretty reliably, so less than it used to, for sure.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
There's a couple things that I'm thinking about. One, I have been here for 18 years, so I've been fortunate to learn a lot of the different parts of the business and seen it from the early days until we are now. And I think over 18 years, we've grown to be $110 billion business, growing at 19%. So that's great. And we're just at the early stages of what that business can be.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so I'm pushing the teams consistently to think about how do we innovate faster? How do we think bigger? And how do we support our customers? And as we think about the potential of AWS being a
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
$200 billion or $300 billion or $500 billion business or whatever size it gets to, I think we continuously just want to think about what are the organizational structures, what are the mechanisms we use, what are the ways that we supported customers that worked to get us to $100 billion and may not work at $200 or $300 billion. I think some of that is just thinking about How do we scale at that?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
How do we think about supporting customers in a great way? How do we think about scaling our services in a great way? How do we think about continuously innovating across many different paths? As you think about, we have to really innovate along our core, what's important, like the thing that got us here around compute and databases and storage and networking.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
But we also have to innovate around AI, we have to innovate around some higher-level capabilities. We have to innovate around analytics.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And we have to innovate around helping customers who maybe are less technically savvy take advantage of the cloud, where they may not be at Netflix-level sophistication, which is obviously a very sophisticated technology team, but want to take advantage of some of the cloud capabilities.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And I think we're continuing to think about how do we keep pushing that envelope on helping more and more customers take advantage of what we have. And I think one of the things that I spend a lot of time thinking about is How do we organize so that our teams don't lose agility and speed as we get bigger?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
That's some of where I'm thinking about, and it's nothing that's broken today, but I think it's kind of looking around corners to where when the business is twice as big as it is today, how do we make sure that we continue to execute and run as fast as possible?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
It's true, and I think that it's probably there's subtlety in there. So I'll take a couple of those one at a time. Number one, we do have a lot of large customers that are running an AWS in the cloud today. A huge number of them still have massive amounts of their estate on-premise. So there's a huge amount of growth for there.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
You can even take our largest customers, many of them only have 10, 20, 30, 40 percent of their workloads in the Cloud. So there's a massive amount of growth just helping them get to 70 or 80 percent or whatever that number is going to be and doesn't even presume you get to 100. I think there's a huge amount of business there.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think there's a huge amount of business and customers that only have one percent or rounding to zero of their estate in the Cloud because they're still running on-prem workloads and they're whether it's IT or core business pieces. And some of it is just they're running in data centers. Some of that is the workloads haven't yet moved to a cloud world. Think telco networks broadly, right?
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Most telco networks still run in traditional telco networks. And there's a handful of customers like the dishes of the world who have kind of thought about and have moved to building because they got to start from zero and have built it in the cloud and get the benefits of that agility. But most haven't. Think about all of the compute that happens in a hospital today is mostly in the hospital.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Those are just examples of where there's an enormous amount of compute that could take advantage of these broad scale Cloud systems that still haven't yet moved there. There's a huge amount of potential in those additional businesses.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
There's also just as you think about new customers, every single year, there's a huge number of startups that are created from scratch and they all start in the Cloud too. There's still lots of greenfield opportunity for us. I think your observation about companies leaning more into SaaS is super interesting and that's why there's such a focus for us.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
And so it's why we focus on deep partnerships of how do we make sure that AWS is the best place to run SAP, it's the best place to run Workday, it's the best place to run ServiceNow, it's the best place to run, you know, keep going down the list, right? And so those SaaS ISVs have always been a really important customer base for us.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
Increasingly, you see us build capabilities that make AWS even more powerful for SaaS vendors. Just at reInvent, we announced a capability called Q Business Index, where you can basically have all of your SaaS data pulled together in a single index that's owned by the enterprise and controlled by the enterprise, but you can share across SaaS products.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I think there's things like that, and you'll see more things like that where we can help customers not just say, okay, my data is in a bunch of these SaaS islands and I can't get benefits across them, I don't think customers won't be an AWS customer because they're still going to have a data lake of their own data. They're still going to have their own applications.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
They're still going to run their own websites. There's other things that customers are still going to want to do. I think more of their applications will be in SaaS as opposed to self-managed software for sure. It's hard to imagine many customers that won't have their own compute storage database needs also.
Decoder with Nilay Patel
Why CEO Matt Garman is willing to bet AWS on AI
I mean, look, you can make that argument for lots of ads too. Like who doesn't know that Coca-Cola exists, but you still see Coca-Cola ads. And so some of it is keeping it top of mind.