00:00 Speaker A
Amazon Web Services. Uh, this business has now truly taken on a life of its own. And this was really, I think, one of the best quarters I’ve ever seen from Amazon in the AWS business. The business accelerated significantly sequentially, margins surged. What else could one possibly want from a key growth growth driver like this inside of a company that, uh, is just super large like Amazon.
00:23 Speaker B
Yeah, I think it was interesting, you know, the kind of whole conversation around AI when it comes to these uh companies is is having a frontier model. You know, you look at Google, they have frontier models, you look at Open AI obviously, Anthropic. Uh, Microsoft, they have open AI and they’re kind of working on their models. Andy Jassy was basically saying on the call, we don’t really need a a kind of frontier model. It’s just not, you know, it’s not necessary for us. We set up uh, AWS so that people can use other models. He said,
01:05 Speaker B
but we’re still working on a frontier model. So it’s not as though they’re they’re not. It’s just that, you know, I think that’s his way of saying, look, we don’t got it now, guys, but we’ll have it at some point and that’ll be even better for us. I think for, uh, what people may look for, uh, you know, obviously the the growth story has been uh huge. This is, I think, the the same thing that Microsoft has seen where, you know, the kind of where show me the money moment, right? Where Microsoft had that that growth story uh earlier this week, it feels like last week, I almost said last week, uh with regards to Azure, uh accelerating and then expecting to accelerate further to 45% growth.
01:45 Speaker B
Next uh current quarter, uh 30 million uh co-pilot seats for uh the AWS side, uh people I think are starting to see, okay, there’s actual, there’s there’s a a here here. Um, or at least we’re starting to see the the the there there here here. Uh, the other thing that I think was interesting was the revenue run rate that they said they’re seeing out of AI specifically as well as the chips business. So they said they had a 25 uh billion dollar run rate uh from AI in AWS.
02:26 Speaker B
Uh obviously they they want to see that continue, but then they said, oh yeah, our chips business also has this $25 billion run rate. Now Andy Jassy has, you know, talked about how the chips business is a multi-billion dollar business before. I think he said if they broke it off on its own and didn’t have to sell into Amazon, it would be $50 billion. Uh, and they’ve discussed going out and selling individual chips to third parties. In other words, not just renting them from their own data centers like they do to Anthropic, but taking the actual chips and allowing people to install them in their own data centers.
03:03 Speaker B
So he’s discussed that. He talked about that on the phone. I I think that’s something that uh people are going to be looking forward to to see, okay, when when does that happen? then what does that look like for Amazon and the AWS business? What what kind of value does that add? And obviously, you know, Google’s doing this, uh meta has its own chips, Microsoft has its own chips, those aren’t selling to other people. Meta is in the, you know, maybe we’ll do the SpaceX thing and rent out. But for for Amazon, it could be a a good play and then you have to think, okay, so what does that mean then I guess for Nvidia?
