The rise of genetic artificial intelligence opens up a huge new market for the big cloud providers, but it’s also a bit of a reset. Unlike the rise of shipping containers, for example, genetic AI is an entirely new market. Some players that have lagged far behind in the overall cloud market – such as Google – are explicitly betting on it to turn their fortunes around. But for AWS, that means it’s now in a position where it potentially has to defend its lead, something the company isn’t used to and something that was made clear in AWS CEO Adam Selipsky’s keynote today.
AWS used to make occasional fun of Oracle during its early keynotes. Today, during a relatively subdued affair by basic AWS standards, there were plenty of references to Google and Microsoft (and its close relationship with OpenAI) — and it felt a lot like Selipsky throwing punches and pulling a few cheap ones downloads at the expense of his competitors. This is not something a company does when it feels it is at the top of its game.
When talking about the AWS data center footprint, for example, Selipsky noted — as he has in previous keynotes — that AWS ensures its availability zones are geographically distributed — not just three zones in the same data center. He then specifically explained that if AWS had a facility like this in France and a fire broke out there, the belt would have gone down. At best, this was a thinly veiled reference to Google outage of several weeks in the Paris data center earlier this year. AWS, of course, has also had its share of outages — just like any other cloud provider. Although to be fair, Google’s outage was too much.
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“Others would have you believe that all clouds are the same, but that’s not true,” he said. “I mean, imagine if you had a region backed by a single data center, or if you thought your provider had multiple AZs in France, for example, and you thought they were resilient, but it turns out they’re actually in the same location. I mean, an incident like a water leak followed by a fire could destroy an entire area for days.”
Then, launching the new Graviton chips, Selipsky also emphasized that “we’re now in our fourth generation in just five years. Other cloud providers haven’t even delivered their first server processors yet.”
But it’s genetic AI where Amazon is most vulnerable right now. For the first time in a long time, it doesn’t have a first-mover advantage in the cloud. Unsurprisingly, the recent OpenAI drama has given the AWS CEO plenty of material to take on the competition, including news that Microsoft briefly stopped its employees from using OpenAI’s ChatGPT due to security concerns.
“You’re not going to use any of this in a serious way if it’s not secure and private,” Selipsky said. “When I think about it, I can’t think of any other cloud providers trying to offer general AI services or customers using generational AI applications. They are not sure about their models and that their data is safe.”
And while Microsoft Azure also offers access to dozens of proprietary and open-source models, Selipsky tried to capitalize on the fact that the company is so closely tied to OpenAI: “Things are moving so fast — and in this type of environment, the adaptability is the most valuable skill you can have. There is not going to be one model to rule them all. And there certainly isn’t going to be one company that provides the models that everyone uses. So you don’t want a cloud provider that is primarily owned by one provider model.”
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During the keynote, Selipsky brought Anthropic CEO Dario Amodei on stage to talk about the close collaboration between the two companies and noted how AWS users will have exclusive early access to some features of its Claude model Anthropic. AWS also plans to invest up to $4 billion in Anthropic, making it a bit like the relationship between Microsoft and OpenAI. But I guess it depends on your perspective.
Speaking about CodeWhisperer, Amazon’s competitor to GitHub’s significantly more successful Copilot, the AWS CEO noted that “other providers that have launched tools have released them without the data privacy and security capabilities that nearly every business requires.”
I think AWS competitors would disagree with that.
The point is that AI is forcing businesses to rethink their cloud strategies. Microsoft’s close relationship with OpenAI gave it an early advantage. Google has long had a reputation in the world of artificial intelligence and machine learning in general. With tools like SageMaker, Bedrock, and now its Q assistant, AWS is arguably on par, but it’s not in its natural element — and its rhetoric shows that.