00:00 Speaker A

you know, if you look at the capital, uh, we’re spending and intend to spend this year, it’s predominantly in AWS. And some of it is for our core workloads, which are our non-AI workloads because they’re growing at a faster rate than we anticipated.

00:20 Speaker A

But most of it is in AI. and we we just have a lot of growth and a lot of demand. And when you’re growing 24% year-over-year with a an annualized revenue run rate of $142 billion, you’re growing a lot.

00:41 Speaker A

And what we’re continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it. So, it’s just a very unusual opportunity. You know, as as, uh, I’ve shared a lot of times,

00:59 Speaker A

I I passionately believe that every customer experience that we know of today is going to be reinvented uh, with AI. They’re going to be a whole bunch of customer experiences that none of us ever imagined that are that are going to become the norms of how we all operate every day and and and what we use.

01:18 Speaker A

I think the other thing is that if you really want to use AI in an expansive way, you need your data in the cloud, and you need your applications in the cloud. Those are all big, uh, tailwinds pushing people towards the cloud. So we’re we’re going to invest aggressively here, and we’re going to invest to be the leader in this space, as we have been for the last number of years.

01:39 Speaker A

We have, I think, a fair bit of experience over the years in AWS, uh, of forecasting demand signals and doing it in such a way that we don’t have a lot of wasted capacity, and that we also have enough capacity to serve the demand that’s that’s there.

02:00 Speaker A

And I I think we’ve also proven with AWS over the years in how we build data centers and how we run them, and how we invent in there, if you think about our chips and our hardware, our networking gear, and how we’ve invented in power, that this isn’t some sort of quixotic, uh, um, top line

02:24 Speaker A

grab. you know, we we have confidence that we, that these investments will yield strong term strong returns and invested capital. We’ve done that with our core AWS business, and I think that will very much be true here as well. And

02:37 Speaker A

I think some of the things that you will see over time, uh, in in the AI space is you’re going to keep seeing all the inference services, which is going to be the majority of the long-term, uh, AI workloads is going to be inference.

02:57 Speaker A

Um, you’re going to see the inference keep getting optimized. You’re going to see higher utilization on those services.

03:04 Speaker A

You’ll see prices normalize over a period of time. And then I think the companies that have the not just the excellence and infrastructure, but also the components that give them, that give customers better price performance and give those companies themselves better economics are going to have advantaged, um, uh, um, financials. And I think

03:32 Speaker A

if you look, we’re already already off to a really good start having Trainium underneath the majority of our uh, bedrock service. And that’s not just giving customers better prices, but it also gives us better economics. And so

03:47 Speaker A

we see that following the same sort sorts of patterns we saw in the early days of our core AWS investment. I’m I’m very confident we’re going to have strong return on invested capital here.