Earnings call · Amazon
Thu Oct 29, Saidwire live coverage archive
https://saidwire.com/archive/earnings-amzn-oct29

STORY (final version)

Amazon Projects AWS Growth Above 40% in 2027 and 2028, Calls $1 Trillion Cloud Business Plausible
CEO Andy Jassy said the cloud unit has strong visibility into customer demand, as Amazon reported record 13.9% operating margin and guided to fourth-quarter sales of $240 billion to $247 billion.

Amazon.com Inc. said Amazon Web Services is projected to grow more than 40% year over year in each of 2027 and 2028, with CEO Andy Jassy saying it is "not a stretch" to imagine the unit becoming a business of over $1 trillion in annual revenue within five to 10 years. Jassy made the comments on the company's third-quarter earnings call, where Amazon reported worldwide revenue of $201.9 billion, up 12%, and operating income of $28.1 billion, an operating margin of 13.9% that Chief Financial Officer Brian Olsavsky said was the company's highest ever.

AWS GROWTH, CHIPS AND CAPACITY
AWS revenue grew 39.3% to $46 billion, which Jassy called the unit's fastest growth in about five to six years and its latest in a run of consecutive quarterly accelerations. The business now has an annualized revenue run rate of $184 billion and added $3.8 billion in revenue from the prior quarter. AWS operating income was $17.8 billion, a 38.7% margin. AI revenue is growing at triple digits year over year, Olsavsky said.
Jassy said the largest blocks of capacity, "the hundreds of megawatts or sometimes up to a gigawatt," are reserved well in advance, giving AWS "very good visibility" into 2027 and 2028 and some of 2029. He said the majority of Bedrock, AWS's service offering multiple AI models, now runs on Amazon's own Trainium chips, and that Amazon will begin selling chips to outside customers in late 2027. Jassy said Bedrock "could be a service as large as" EC2, one of the largest AWS services today.
Olsavsky said the outsized growth of AI puts pressure on overall AWS margins because AI margins are lower than those of core services, and he cited component pricing as another headwind. Amazon does not guide on AWS margins.

SPENDING AND FOURTH-QUARTER OUTLOOK
Cash capital expenditures were $75.9 billion in the quarter, primarily for AWS and AI. Asked about the capex required to sustain 40% growth, Jassy called it "a once in a lifetime opportunity" and said Amazon can fund the plan. He said it "will forever change the size of amazon."
For the fourth quarter, Amazon guided to net sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion. Olsavsky said the guidance reflects Amazon Leo satellite service costs: the company now expects to begin capitalizing certain Leo costs in the first quarter of next year, later than he had earlier predicted, so it will continue expensing most Leo-related costs in the fourth quarter. Leo remains on track to begin initial service this year. Olsavsky also said fuel and line haul inflation will be higher in the fourth quarter than in the third.

RETAIL, ADVERTISING AND ROBOTICS
North America revenue rose 6% to $112.9 billion with an operating margin of 7.7%; international revenue was $43.1 billion, up 8% excluding foreign exchange, with a 3.7% margin. Prime Day moved into the second quarter for most countries this year, which Olsavsky said would have added about 400 basis points to year-over-year growth had it stayed in the third quarter. Worldwide paid units grew 12%.
Advertising revenue was $19.6 billion, up 12%. Jassy said the Prime Day shift was an 850 basis point sequential headwind to advertising growth, and the company expects year-over-year growth to return to the high teens in the fourth quarter. He said agentic shopping from external AI agents is not meaningfully affecting Amazon Ads. Jassy said Prime Video now has a revenue run rate in the tens of billions of dollars and is profitable on its own.
Jassy said Amazon has more than a million robots in its fulfillment network and expects many repetitive jobs now done by people to be done by robots. Olsavsky said the company doubled its fleet of robotic arms in 2026. Shipping costs rose 11% against 12% unit growth.

BULLETINS
5:16:24 PM ET  AMAZON: ADS REVENUE $19.6 BILLION IN Q3, UP 12% YEAR OVER YEAR
5:17:51 PM ET  AMAZON: EXPECTS YEAR OVER YEAR ADS GROWTH TO RETURN TO HIGH TEENS IN Q4
5:19:17 PM ET  AMAZON: PRIME VIDEO REVENUE RUN RATE IN TENS OF BILLIONS OF DOLLARS, NOW PROFITABLE ON ITS OWN
5:19:55 PM ET  AMAZON: LEO SATELLITE BROADBAND ON TRACK TO BEGIN INITIAL SERVICE THIS YEAR
5:20:40 PM ET  AMAZON CFO: Q3 REVENUE $201.9 BILLION, UP 12% YEAR OVER YEAR; OPERATING INCOME $28.1 BILLION
5:21:42 PM ET  AMAZON CFO: Q3 OPERATING MARGIN 13.9%, HIGHEST EVER; NORTH AMERICA REVENUE $112.9 BILLION
5:22:27 PM ET  AMAZON CFO: INTERNATIONAL REVENUE $43.1 BILLION, UP 8% YOY EX-FX; OPERATING MARGIN 3.7%
5:23:10 PM ET  AMAZON CFO: AWS REVENUE $46 BILLION IN Q3, GREW 39.3% YEAR OVER YEAR
5:23:55 PM ET  AMAZON CFO: AWS ANNUALIZED REVENUE RUN RATE $184 BILLION; AWS OPERATING INCOME $17.8 BILLION
5:25:14 PM ET  AMAZON CFO: AWS OPERATING MARGIN 38.7%; AI REVENUE GROWING TRIPLE DIGITS YEAR OVER YEAR
5:27:39 PM ET  AMAZON CFO: Q4 OPERATING INCOME SEEN $28.5 BILLION TO $33.5 BILLION
5:30:29 PM ET  AMAZON CEO: AWS CAPACITY GROWTH PROJECTED OVER 40% YOY IN EACH OF 2027 AND 2028
5:31:06 PM ET  AMAZON: AWS CAN BE A $1 TRILLION REVENUE BUSINESS IN FIVE TO TEN YEARS, EXEC SAYS
5:32:38 PM ET  AMAZON EXEC: Q4 FUEL AND LINE HAUL INFLATION HIGHER THAN IN Q3, NO EXACT NUMBER GIVEN
5:33:27 PM ET  AMAZON CEO: HAS VERY GOOD VISIBILITY INTO AWS 2027, 2028 AND SOME OF 2029 LARGE CAPACITY DEMAND
5:36:39 PM ET  AMAZON CEO: HAS OVER A MILLION ROBOTS NOW IN ITS FULFILLMENT NETWORK
5:39:28 PM ET  AMAZON EXEC: NOT GUIDING ON AWS MARGIN; CUSTOM CHIPS TO BE MORE OF COST STRUCTURE OVER TIME
5:40:08 PM ET  AMAZON EXEC: AI MARGINS LOWER THAN CORE AWS, MIX AND COMPONENT PRICING SEEN AS MARGIN HEADWINDS
5:42:37 PM ET  AMAZON EXEC: EVERYDAY ESSENTIALS GROWN ABOUT 3X FASTER THAN REST OF STORE, HALF OF UNITS NOW
5:43:27 PM ET  AMAZON EXEC: SAME-DAY PERISHABLES CUSTOMERS BUY ABOUT 7X MORE EVERYDAY ESSENTIAL UNITS
5:44:06 PM ET  AMAZON EXEC: GROCERY CUSTOMERS SHOP FOUR TIMES MORE NON-GROCERY CATEGORIES LIKE HOME, APPAREL
5:44:54 PM ET  AMAZON EXEC: SEES SIX TO EIGHT AI MODELS ABOUT AS GOOD AS EACH OTHER IN NEXT TWO TO THREE YEARS
5:46:15 PM ET  AMAZON EXEC: BEDROCK OPPORTUNITY 'GIGANTIC', COULD BE A SERVICE AS LARGE AS EC2
5:47:39 PM ET  AMAZON EXEC: ONLY TWO COMPANIES HAVE BIG CLOUD AND CHIP STRONG ENOUGH TO SELL EXTERNALLY
5:49:02 PM ET  AMAZON EXEC: TO START SELLING CHIPS EXTERNALLY IN LATE 2027, EXPECTS VERY SIGNIFICANT BUSINESS
5:50:29 PM ET  AMAZON EXEC: AWS GROWING 39% AT $184 BILLION RUN RATE, SEES 40% GROWTH EACH OF NEXT TWO YEARS
5:51:50 PM ET  AMAZON EXEC: AI OPPORTUNITY 'ONCE IN A LIFETIME', WILL INVEST TO LEAD; 'WE CAN FUND THIS PLAN'
5:52:32 PM ET  AMAZON EXEC: MAJORITY OF BEDROCK RUNNING ON TRAINIUM, LIKES PRICE PERFORMANCE AND MARGINS
5:53:52 PM ET  AMAZON EXEC: NEO CLOUDS ABOUT 3,500 BASIS POINTS WORSE IN OPERATING MARGIN THAN LONG LEASING

POSTS (quotes verbatim; each shows when the words were said and when we drafted it)

Amazon said Prime Video has "emerged as a significant business with a revenue run rate in the tens of billions of dollars and now profitable in its own right" on its third-quarter earnings call Thursday.
  said 5:18:36 PM ET · drafted 5:19:10 PM ET

Amazon CFO Brian Olsavsky: "Worldwide operating income was $28.1 billion with an operating margin of 13.9% which is our highest operating margin ever."
  said 5:20:09 PM ET · drafted 5:21:03 PM ET

Amazon CFO Brian Olsavsky said the company "doubled our fleet of robotic arms like cardinal and sparrow" in 2026, as it works to improve fulfillment network productivity with robotics and AI.
  said 5:22:27 PM ET · drafted 5:22:49 PM ET

Amazon expects fourth-quarter net sales of "between $240 billion and $49 billion," its CFO said on the earnings call. Operating income is expected at $28.5 billion to $33.5 billion.
  said 5:25:01 PM ET · drafted 5:25:43 PM ET

Amazon said AWS revenue grew 39.3% and is on a $184 billion annual run rate. An Amazon executive called it "our fastest growth in about five years or six" and cited a consecutive quarter of acceleration.
  said 5:27:38 PM ET · drafted 5:29:06 PM ET

An Amazon executive said the company has "a lot of capacity coming as well" for AWS over the next eight to 10 quarters, responding to an analyst's question about slowing quarter-over-quarter growth.
  said 5:29:12 PM ET · drafted 5:30:21 PM ET

An Amazon executive said projecting AWS to grow over forty percent year over year in each of 2027 and 2028 "is pretty significant," adding the company believes it "can be a $1 trillion revenue business."
  said 5:30:21 PM ET · drafted 5:31:41 PM ET

Amazon on AWS capacity: "We have very good visibility into 2027 and 2028," an executive said, adding that large blocks of hundreds of megawatts up to a gigawatt are reserved well in advance.
  said 5:32:38 PM ET · drafted 5:33:45 PM ET

An Amazon executive said lowering the "cost of inference down that is a huge mission for aws" and said Amazon is building custom Trainium chips to help. He said costs will "come down meaningfully more."
  said 5:33:53 PM ET · drafted 5:34:46 PM ET

Amazon exec on AWS: "It's not a stretch for us to imagine that this could be over $1 trillion business." He said no one can predict five to ten years out with certainty, citing early enterprise inference use.
  said 5:35:42 PM ET · drafted 5:36:02 PM ET

Amazon CEO Andy Jassy says "we have over 1 million robots now in our fulfillment network." He said robotics has improved safety and cost, and that a lot of repetitive jobs now done by humans will be done by robots.
  said 5:36:04 PM ET · drafted 5:37:18 PM ET

Amazon's CFO said "outsized growth of ai puts margin pressure on the business as a whole because the margins are lower there." He cited a 38.7% AWS operating margin this quarter and gave no margin guidance.
  said 5:39:39 PM ET · drafted 5:39:55 PM ET

Amazon executive said everyday essentials have grown "about three times faster than the rest of our store" and now represent about half of its units, citing perishables shipped from same-day facilities.
  said 5:41:47 PM ET · drafted 5:42:01 PM ET

An Amazon executive said customers who shop perishables through same-day delivery buy "about seven times more everyday essential units than those that don't." Grocery shoppers also buy from more non-grocery categories.
  said 5:41:59 PM ET · drafted 5:44:10 PM ET

An Amazon executive on the earnings call, on AI models: "In the next two to three years I think they're gonna be six to eight models that are about as good as each other." Amazon said most customers will use multiple models.
  said 5:44:23 PM ET · drafted 5:44:57 PM ET

Amazon executive on AWS's Bedrock: "The size of the opportunity in bedrock is gigantic and it could be a service as large as ecc." He said EC2, as the service is known, is a very large service in AWS today.
  said 5:45:47 PM ET · drafted 5:46:58 PM ET

Amazon expects to begin selling its custom AI chips externally in late 2027, an Amazon executive said on the company's earnings call Thursday, calling it "a very significant business."
  said 5:47:46 PM ET · drafted 5:48:18 PM ET

Amazon executive Andy Jassy said capital spending needed to sustain AWS growth is "meaningful." He described AI as "the biggest transformation in our lifetime" during the Oct. 29 earnings call.
  said 5:49:55 PM ET · drafted 5:50:20 PM ET

Amazon CEO Andy Jassy said the company "can fund this plan" to grow AWS 40% annually. He said the AI opportunity "will forever change our free cash flow," per Thursday's earnings call.
  said 5:50:55 PM ET · drafted 5:51:21 PM ET

Amazon CEO Andy Jassy said "the majority and most of bedrock day is being run on top of trainium," responding to a Barclays analyst's question on Bedrock workloads and AWS margins.
  said 5:52:05 PM ET · drafted 5:52:27 PM ET

Amazon CEO Andy Jassy on a call with analysts: "Neo clouds are about 3500 basis points worse in operating margin than if you long lease them."
  said 5:52:51 PM ET · drafted 5:53:44 PM ET

Amazon CEO Andy Jassy said running AWS on its own chips provides "structural cost advantages that I think are going to be very helpful" to customers and to AWS economics, on the company's earnings call Thursday.
  said 5:54:01 PM ET · drafted 5:54:50 PM ET

TRANSCRIPT (copy-edited; times Eastern)

[4:35:19 PM ET] Welcome
[4:35:19 PM ET] to
[4:35:20 PM ET] Amazon
[4:35:20 PM ET] Q3
[4:35:21 PM ET] 2026
[4:35:21 PM ET] Earnings
[4:35:22 PM ET] welcome to amazon q3 twenty twenty six earnings call
[4:35:22 PM ET] Call.
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[4:36:02 PM ET] you.
[4:36:03 PM ET] I have
[4:36:03 PM ET] Hudson
[4:36:03 PM ET] Leach
[4:36:05 PM ET] H-U-D-S-O-N,
[4:36:06 PM ET] thank you i have hudson leach h u d s o n
[4:36:07 PM ET] L-E-A-C-H, is a very good
[4:36:07 PM ET] that the same
[4:36:07 PM ET] name of
[4:36:07 PM ET] the
[4:36:08 PM ET] l e a c h is that the name of the company
[4:36:08 PM ET] company?
[4:36:08 PM ET] L E A
[4:36:09 PM ET] C H is the name of the
[4:36:09 PM ET] that
[4:36:10 PM ET] l e a c h is that correct
[4:36:11 PM ET] correct?
[4:36:26 PM ET] Thank
[4:36:27 PM ET] you.
[4:36:27 PM ET] I have Hudson
[4:36:28 PM ET] Leach,
[4:36:29 PM ET] H-U-D-S-O-N,
[4:36:30 PM ET] thank you i have hudson leach h u d s o n
[4:36:31 PM ET] L-E-A-C-H,
[4:36:31 PM ET] and all of the things that we have to
[4:36:31 PM ET] note
[4:36:31 PM ET] you as a single
[4:36:32 PM ET] private
[4:36:33 PM ET] investor. Is
[4:36:33 PM ET] that
[4:36:33 PM ET] all
[4:36:34 PM ET] l e a c h and i'll note you as a private investor is that all correct
[4:36:35 PM ET] correct?
[4:36:51 PM ET] The tickets are
[4:36:51 PM ET] you,
[4:36:52 PM ET] Hudson. I have your
[4:36:53 PM ET] name
[4:36:53 PM ET] as
[4:36:53 PM ET] Hudson
[4:36:54 PM ET] Leach,
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[4:36:57 PM ET] The first thing is that we have a very important
[4:36:57 PM ET] The first thing to do is to be able to do
[4:36:57 PM ET] and
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[4:36:57 PM ET] note that the
[4:36:58 PM ET] correctness is a very
[4:36:58 PM ET] as
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[4:36:58 PM ET] private
[4:36:59 PM ET] u d s o n l e a c h and i'll note you as a private investor
[4:36:59 PM ET] investor. Is that
[4:37:00 PM ET] is that correct
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[4:37:26 PM ET] Amazon
[4:37:26 PM ET] Q3
[4:37:27 PM ET] 2026 or
[4:37:27 PM ET] Earnings
[4:37:28 PM ET] welcome to amazon q three twenty twenty six earnings call
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[4:47:04 PM ET] Welcome
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[4:47:05 PM ET] Amazon
[4:47:06 PM ET] Q3
[4:47:07 PM ET] 2026
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[4:47:34 PM ET] a
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[4:47:47 PM ET] Thank
[4:47:48 PM ET] you.
[4:47:48 PM ET] I have Hudson
[4:47:49 PM ET] Leach,
[4:47:51 PM ET] thank you i have hudson leach
[4:47:51 PM ET] H-U-D-S-O-N,
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[4:47:54 PM ET] h u d s o n l e a c h is that correct
[4:47:54 PM ET] correct?
[4:48:29 PM ET] Welcome to the next
[4:48:30 PM ET] Amazon
[4:48:31 PM ET] Q3
[4:48:32 PM ET] 2026
[4:48:32 PM ET] Earnings
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[4:48:58 PM ET] This will
[4:48:58 PM ET] only take a
[4:48:59 PM ET] this will only
[4:49:02 PM ET] to be able to do it.
[4:49:12 PM ET] Thank
[4:49:13 PM ET] you.
[4:49:13 PM ET] I have
[4:49:13 PM ET] Hudson
[4:49:14 PM ET] Leach,
[4:49:16 PM ET] H-U-D-S-O-N,
[4:49:16 PM ET] thank you i have hudson leach
[4:49:17 PM ET] L-E-A-C-H
[4:49:17 PM ET] Is that
[4:49:18 PM ET] h u d s o n l e a c h is that correct
[4:49:18 PM ET] correct?
[4:49:37 PM ET] Thank
[4:49:38 PM ET] you.
[4:49:38 PM ET] I have Hudson
[4:49:39 PM ET] Leach,
[4:49:39 PM ET] thank you i have hudson leach
[4:49:40 PM ET] H-U-D-S-O-N,
[4:49:42 PM ET] L-E-A-C-H
[4:49:42 PM ET] Is that
[4:49:43 PM ET] h u d s o n l e a c h is that correct
[4:49:43 PM ET] correct?
[4:50:02 PM ET] But thank
[4:50:03 PM ET] thank you
[4:50:03 PM ET] you.
[4:50:03 PM ET] I have Hudson
[4:50:04 PM ET] Leach,
[4:50:06 PM ET] H-U-D-S-O-N,
[4:50:06 PM ET] i have hudson leach h u d s o n
[4:50:07 PM ET] I think that's a good
[4:50:07 PM ET] The first thing that we have to do is to be able to do
[4:50:08 PM ET] that
[4:50:08 PM ET] Is
[4:50:08 PM ET] l e a c h is that correct
[4:50:09 PM ET] correct?
[4:50:27 PM ET] Thank
[4:50:28 PM ET] you.
[4:50:29 PM ET] And you mentioned you're a
[4:50:29 PM ET] private
[4:50:29 PM ET] thank you
[4:50:30 PM ET] investor.
[4:50:30 PM ET] so I'll note
[4:50:30 PM ET] you as a
[4:50:30 PM ET] private
[4:50:31 PM ET] investor. Is that
[4:50:32 PM ET] and you mentioned you're a private investor so i'll note you as a private investor is that right
[4:50:33 PM ET] right?
[4:50:53 PM ET] Perfect.
[4:50:53 PM ET] I'm
[4:50:53 PM ET] transferring
[4:50:53 PM ET] you to the next
[4:50:54 PM ET] earnings
[4:50:54 PM ET] call
[4:50:55 PM ET] perfect i'm transferring you to the earnings call now
[4:50:55 PM ET] now.
[4:50:56 PM ET] Please stay
[4:50:56 PM ET] on the
[4:50:57 PM ET] line, you will be able to do
[4:50:57 PM ET] connected the
[4:50:58 PM ET] to
[4:50:58 PM ET] the
[4:50:58 PM ET] event
[4:50:59 PM ET] please stay on the line you will be connected to the event shortly
[4:51:00 PM ET] shortly.
[4:51:00 PM ET] Welcome to the
[4:51:01 PM ET] Amazon
[4:51:02 PM ET] Q3
[4:51:02 PM ET] 2026
[4:51:03 PM ET] Earnings
[4:51:03 PM ET] Call.
[4:51:04 PM ET] scheduled
[4:51:04 PM ET] December
[4:51:04 PM ET] to
[4:51:04 PM ET] welcome to amazon q three twenty twenty six earnings call scheduled to
[4:51:04 PM ET] start
[4:51:04 PM ET] at
[4:51:05 PM ET] 5
[4:51:05 PM ET] p.m.
[4:51:06 PM ET] start at five pm edt
[4:51:06 PM ET] EGT.
[4:51:07 PM ET] You will
[4:51:07 PM ET] remain
[4:51:07 PM ET] muted
[4:51:08 PM ET] until it is
[4:51:08 PM ET] your
[4:51:08 PM ET] turn
[4:51:08 PM ET] to
[4:51:08 PM ET] ask
[4:51:09 PM ET] a
[4:51:10 PM ET] you will remain muted until it is your turn to ask a question
[4:51:10 PM ET] a
[4:51:10 PM ET] question.
[4:51:10 PM ET] For a list of
[4:51:11 PM ET] participant
[4:51:12 PM ET] controls,
[4:51:12 PM ET] press
[4:51:12 PM ET] star
[4:51:13 PM ET] for a list of participant controls press star nine
[4:51:13 PM ET] 9.
[4:51:14 PM ET] For
[4:51:14 PM ET] operator
[4:51:15 PM ET] assistance,
[4:51:15 PM ET] for operator assistance
[4:51:15 PM ET] press
[4:51:15 PM ET] star
[4:51:16 PM ET] press star zero
[4:51:16 PM ET] 0.
[4:51:20 PM ET] Reviewer's
[4:54:27 PM ET] Reviewer's
[4:57:35 PM ET] Reviewer's
[5:00:43 PM ET] Reviewer's
[5:03:51 PM ET] Reviewer's
[5:06:59 PM ET] Reviewer's
[5:10:07 PM ET] Reviewer's
[5:10:44 PM ET] Welcome
[5:10:45 PM ET] to
[5:10:45 PM ET] Amazon
[5:10:46 PM ET] Q3
[5:10:47 PM ET] 2026
[5:10:47 PM ET] Earnings
[5:10:47 PM ET] welcome to amazon q3 twenty twenty six earnings call
[5:10:48 PM ET] Call.
[5:10:48 PM ET] If you've
[5:10:49 PM ET] registered in the US, you can see that
[5:10:49 PM ET] in
[5:10:50 PM ET] if you've registered in advance
[5:10:50 PM ET] advance,
[5:10:50 PM ET] please
[5:10:50 PM ET] enter
[5:10:50 PM ET] your
[5:10:51 PM ET] unique
[5:10:51 PM ET] passcode
[5:10:52 PM ET] please enter your unique passcode now
[5:10:52 PM ET] now.
[5:10:53 PM ET] Otherwise, please enter your
[5:10:53 PM ET] otherwise
[5:10:53 PM ET] hold
[5:10:54 PM ET] while you're in the
[5:10:54 PM ET] we watch
[5:10:54 PM ET] try to pass
[5:10:54 PM ET] your
[5:10:54 PM ET] you to the
[5:10:55 PM ET] an
[5:10:55 PM ET] AI
[5:10:56 PM ET] agent
[5:10:56 PM ET] for
[5:10:57 PM ET] please hold while we transfer you to an ai agent for registration
[5:10:58 PM ET] registration.
[5:11:02 PM ET] Please help
[5:11:02 PM ET] on to the next
[5:11:02 PM ET] while you're in middle
[5:11:03 PM ET] you
[5:11:03 PM ET] are
[5:11:03 PM ET] trying to get away from the
[5:11:03 PM ET] transferred
[5:11:04 PM ET] an
[5:11:04 PM ET] AI.
[5:11:05 PM ET] agent
[5:11:05 PM ET] for
[5:11:05 PM ET] please hold while you are
[5:11:06 PM ET] to an ai agent for registration
[5:11:07 PM ET] registration.
[5:11:08 PM ET] Hello.
[5:11:09 PM ET] I'll need to
[5:11:09 PM ET] collect
[5:11:09 PM ET] a
[5:11:09 PM ET] few
[5:11:09 PM ET] pieces of the
[5:11:10 PM ET] information
[5:11:10 PM ET] to raise
[5:11:11 PM ET] register
[5:11:11 PM ET] hello i'll need to collect a
[5:11:11 PM ET] you for
[5:11:11 PM ET] the
[5:11:12 PM ET] pieces of information to register you for the call
[5:11:12 PM ET] call.
[5:11:13 PM ET] This will
[5:11:13 PM ET] only
[5:11:13 PM ET] take
[5:11:13 PM ET] a
[5:11:14 PM ET] this will only take a moment
[5:11:15 PM ET] moment.
[5:11:28 PM ET] Thank
[5:11:29 PM ET] you.
[5:11:29 PM ET] I have Hudson
[5:11:30 PM ET] Leach,
[5:11:31 PM ET] H-U-D-S-O-N,
[5:11:32 PM ET] thank you i have hudson leach
[5:11:33 PM ET] L-E-A-C-H. Is
[5:11:33 PM ET] that
[5:11:34 PM ET] h u d s o n l e a c h is that correct
[5:11:34 PM ET] correct?
[5:11:52 PM ET] Thank
[5:11:53 PM ET] you.
[5:11:53 PM ET] I have Hudson
[5:11:54 PM ET] Leach,
[5:11:54 PM ET] thank you i have hudson leach
[5:11:55 PM ET] H-U-D-S-O-N,
[5:11:56 PM ET] N L E A C H
[5:11:56 PM ET] Is that
[5:11:57 PM ET] h u d s o n l e a c h is that correct
[5:11:58 PM ET] correct?
[5:12:17 PM ET] Thank
[5:12:17 PM ET] you,
[5:12:18 PM ET] thank you hudson
[5:12:18 PM ET] Hudson.
[5:12:19 PM ET] I'll note
[5:12:19 PM ET] you as a matter of
[5:12:19 PM ET] private
[5:12:20 PM ET] i'll note you as a private investor
[5:12:21 PM ET] investor.
[5:12:22 PM ET] Please
[5:12:22 PM ET] stay on the
[5:12:23 PM ET] line. You will be able to do
[5:12:23 PM ET] connected the
[5:12:24 PM ET] to
[5:12:24 PM ET] event
[5:12:25 PM ET] please stay on the line you will be connected to the event shortly
[5:12:26 PM ET] shortly.
[5:16:00 PM ET] Have questions on product details.
[5:16:00 PM ET] detail pages.
[5:16:00 PM ET] and that you
[5:16:01 PM ET] can
[5:16:02 PM ET] simply
[5:16:02 PM ET] ask to
[5:16:03 PM ET] expired have questions on product detail pages
[5:16:03 PM ET] buy something based
[5:16:04 PM ET] on your
[5:16:04 PM ET] prior
[5:16:05 PM ET] purchases that
[5:16:05 PM ET] already
[5:16:06 PM ET] has your
[5:16:06 PM ET] and that you can simply ask to buy something based on your prior purchases
[5:16:06 PM ET] history
[5:16:07 PM ET] your
[5:16:08 PM ET] shipping
[5:16:08 PM ET] address
[5:16:08 PM ET] that already have your history
[5:16:08 PM ET] and
[5:16:09 PM ET] payment
[5:16:09 PM ET] info is
[5:16:10 PM ET] your shipping address and payment info
[5:16:10 PM ET] uniquely
[5:16:10 PM ET] helpful and
[5:16:11 PM ET] convenient for
[5:16:12 PM ET] is uniquely helpful and convenient for customers
[5:16:12 PM ET] customers.
[5:16:14 PM ET] Moving to
[5:16:14 PM ET] Amazon
[5:16:14 PM ET] moving to amazon ads
[5:16:14 PM ET] Ads.
[5:16:14 PM ET] we
[5:16:15 PM ET] generated
[5:16:15 PM ET] 19% of the
[5:16:17 PM ET] billion
[5:16:17 PM ET] of
[5:16:18 PM ET] revenue in
[5:16:18 PM ET] Q3, up
[5:16:18 PM ET] 12% year over
[5:16:19 PM ET] we generated nineteen point six billion dollars of revenue in q3 up twelve percent year over year
[5:16:20 PM ET] year.
[5:16:20 PM ET] Though there
[5:16:20 PM ET] are
[5:16:20 PM ET] were some
[5:16:21 PM ET] timing
[5:16:21 PM ET] anomalies
[5:16:21 PM ET] in
[5:16:22 PM ET] this
[5:16:22 PM ET] past
[5:16:23 PM ET] quarter, we
[5:16:23 PM ET] continue
[5:16:23 PM ET] to
[5:16:23 PM ET] be
[5:16:23 PM ET] pleased with
[5:16:24 PM ET] the
[5:16:24 PM ET] overall
[5:16:24 PM ET] though there were some timing anomalies in this past quarter we continue to be
[5:16:24 PM ET] momentum across the
[5:16:26 PM ET] our ad
[5:16:26 PM ET] pleased with the overall momentum across our ad offerings
[5:16:27 PM ET] offerings.
[5:16:27 PM ET] I'll mention
[5:16:28 PM ET] three
[5:16:28 PM ET] items
[5:16:28 PM ET] impacting the
[5:16:29 PM ET] growth
[5:16:29 PM ET] i'll mention three items impacting the growth rates
[5:16:30 PM ET] rates.
[5:16:30 PM ET] first
[5:16:30 PM ET] First, we
[5:16:31 PM ET] shifted
[5:16:31 PM ET] prime
[5:16:32 PM ET] day
[5:16:32 PM ET] into
[5:16:32 PM ET] Q2
[5:16:33 PM ET] for
[5:16:33 PM ET] most
[5:16:34 PM ET] we shifted prime day into q2 for most countries
[5:16:34 PM ET] countries,
[5:16:34 PM ET] moving
[5:16:36 PM ET] significant sales
[5:16:36 PM ET] and add
[5:16:36 PM ET] revenue that
[5:16:37 PM ET] were in
[5:16:38 PM ET] Q325
[5:16:38 PM ET] into
[5:16:38 PM ET] Q
[5:16:39 PM ET] moving significant sales and ad revenue that were in q3 twenty twenty five into
[5:16:39 PM ET] q2 twenty twenty six
[5:16:40 PM ET] Q226.
[5:16:40 PM ET] a tailwind
[5:16:40 PM ET] to our
[5:16:41 PM ET] Q2
[5:16:42 PM ET] 2026
[5:16:42 PM ET] rate and a
[5:16:43 PM ET] headwind
[5:16:43 PM ET] to
[5:16:44 PM ET] Q3
[5:16:44 PM ET] a tailwind to our q2 twenty twenty six rate and a headwind to q3 twenty
[5:16:45 PM ET] twenty six
[5:16:45 PM ET] 2026.
[5:16:46 PM ET] For
[5:16:47 PM ET] advertising,
[5:16:47 PM ET] that
[5:16:47 PM ET] was
[5:16:47 PM ET] for advertising that was
[5:16:48 PM ET] 850
[5:16:49 PM ET] basis
[5:16:49 PM ET] per
[5:16:49 PM ET] points to
[5:16:50 PM ET] sequential
[5:16:50 PM ET] impact
[5:16:51 PM ET] to
[5:16:51 PM ET] Q3
[5:16:51 PM ET] year over
[5:16:52 PM ET] eight fifty basis points sequential impact to q3 year over year growth
[5:16:53 PM ET] growth.
[5:16:54 PM ET] Second,
[5:16:55 PM ET] Q226
[5:16:55 PM ET] included
[5:16:55 PM ET] the
[5:16:55 PM ET] first
[5:16:56 PM ET] season
[5:16:56 PM ET] of
[5:16:56 PM ET] NBA
[5:16:56 PM ET] on Prime
[5:16:57 PM ET] which lasted the first
[5:16:57 PM ET] second q2 twenty twenty six included the first season of nba on prime
[5:16:58 PM ET] year's
[5:16:58 PM ET] Q2 didn't have to
[5:16:59 PM ET] which last year's q2 didn't have
[5:16:59 PM ET] while
[5:17:00 PM ET] Q3 didn't have a lot
[5:17:00 PM ET] to
[5:17:00 PM ET] not
[5:17:01 PM ET] include
[5:17:01 PM ET] any
[5:17:02 PM ET] NBA. It
[5:17:02 PM ET] starts in
[5:17:02 PM ET] while q3 does not include any nba and starts in q4
[5:17:03 PM ET] Q4.
[5:17:03 PM ET] And
[5:17:04 PM ET] third, in
[5:17:05 PM ET] Q3
[5:17:06 PM ET] 2025, we
[5:17:06 PM ET] changed
[5:17:06 PM ET] our
[5:17:07 PM ET] search
[5:17:07 PM ET] engine
[5:17:07 PM ET] marketing
[5:17:08 PM ET] and third in q3 twenty twenty five we changed our search engine marketing
[5:17:08 PM ET] programs to
[5:17:08 PM ET] drive
[5:17:09 PM ET] more
[5:17:09 PM ET] traffic
[5:17:09 PM ET] to search
[5:17:10 PM ET] pages on
[5:17:10 PM ET] to drive more traffic to search pages on amazon
[5:17:11 PM ET] Amazon.
[5:17:12 PM ET] It's a better
[5:17:12 PM ET] experience
[5:17:12 PM ET] for
[5:17:13 PM ET] customers and we
[5:17:13 PM ET] also
[5:17:14 PM ET] monetize
[5:17:14 PM ET] that
[5:17:15 PM ET] traffic at a
[5:17:15 PM ET] higher
[5:17:15 PM ET] it's a better experience for customers and we also monetize that traffic at a higher rate
[5:17:16 PM ET] rate and
[5:17:16 PM ET] helped
[5:17:17 PM ET] accelerate
[5:17:18 PM ET] advertising
[5:17:18 PM ET] revenue
[5:17:18 PM ET] growth
[5:17:19 PM ET] starting a
[5:17:19 PM ET] year
[5:17:20 PM ET] ago.
[5:17:20 PM ET] and we started
[5:17:20 PM ET] lapping
[5:17:20 PM ET] that
[5:17:20 PM ET] it helped accelerate advertising revenue growth starting a year ago and we
[5:17:21 PM ET] in
[5:17:21 PM ET] Q
[5:17:21 PM ET] started lapping that in q3
[5:17:22 PM ET] We expect
[5:17:23 PM ET] year over
[5:17:23 PM ET] growth to
[5:17:24 PM ET] with a
[5:17:24 PM ET] have return to the 20th
[5:17:25 PM ET] high
[5:17:25 PM ET] teens
[5:17:25 PM ET] and
[5:17:25 PM ET] in
[5:17:25 PM ET] Q
[5:17:26 PM ET] we expect year over year growth will return to the high teens in q4
[5:17:26 PM ET] four.
[5:17:27 PM ET] A natural
[5:17:27 PM ET] question is
[5:17:28 PM ET] whether
[5:17:28 PM ET] a
[5:17:28 PM ET] Agentic
[5:17:29 PM ET] shopping
[5:17:29 PM ET] from
[5:17:29 PM ET] external
[5:17:30 PM ET] horizontal
[5:17:31 PM ET] agents
[5:17:31 PM ET] a natural question is whether agentix shopping from
[5:17:31 PM ET] is
[5:17:31 PM ET] meaningfully
[5:17:32 PM ET] impacting
[5:17:32 PM ET] Amazon
[5:17:33 PM ET] external horizontal agents is meaningfully impacting amazon ads
[5:17:33 PM ET] ads.
[5:17:33 PM ET] and the answer
[5:17:34 PM ET] is
[5:17:34 PM ET] and the answer is no
[5:17:35 PM ET] no.
[5:17:35 PM ET] Few
[5:17:35 PM ET] customers
[5:17:36 PM ET] are
[5:17:36 PM ET] doing
[5:17:36 PM ET] much
[5:17:36 PM ET] shopping this
[5:17:37 PM ET] way
[5:17:38 PM ET] yet as the
[5:17:38 PM ET] experience
[5:17:38 PM ET] is
[5:17:38 PM ET] still
[5:17:38 PM ET] not
[5:17:39 PM ET] few customers are doing much shopping this way yet
[5:17:39 PM ET] great nor
[5:17:40 PM ET] more
[5:17:40 PM ET] convenient than
[5:17:40 PM ET] coming to
[5:17:41 PM ET] a
[5:17:41 PM ET] retailer
[5:17:42 PM ET] as the experience is still not great nor more convenient than coming to a retailer directly
[5:17:42 PM ET] directly to
[5:17:43 PM ET] research or
[5:17:43 PM ET] one-click
[5:17:44 PM ET] order
[5:17:44 PM ET] to research for one click order there
[5:17:45 PM ET] there.
[5:17:46 PM ET] Q3
[5:17:46 PM ET] was
[5:17:46 PM ET] chock full
[5:17:47 PM ET] of
[5:17:47 PM ET] innovation
[5:17:47 PM ET] from
[5:17:48 PM ET] our
[5:17:48 PM ET] ads
[5:17:48 PM ET] q3 was chock full of innovation from our ads team
[5:17:49 PM ET] team that
[5:17:49 PM ET] we
[5:17:49 PM ET] expected to
[5:17:49 PM ET] expect have
[5:17:50 PM ET] impact in the
[5:17:50 PM ET] coming
[5:17:51 PM ET] that we expect to have impact in the coming months
[5:17:51 PM ET] months.
[5:17:52 PM ET] Headline by
[5:17:52 PM ET] Amazon
[5:17:53 PM ET] Ads
[5:17:53 PM ET] Agent,
[5:17:53 PM ET] which
[5:17:53 PM ET] brings
[5:17:54 PM ET] together
[5:17:54 PM ET] our
[5:17:54 PM ET] full
[5:17:55 PM ET] advertising
[5:17:55 PM ET] offering
[5:17:56 PM ET] under
[5:17:56 PM ET] a
[5:17:56 PM ET] single AI
[5:17:56 PM ET] headlined by amazon ads agent which brings together our full advertising offering under a
[5:17:56 PM ET] first
[5:17:57 PM ET] single ai first platform
[5:17:58 PM ET] platform.
[5:17:58 PM ET] Backed
[5:17:58 PM ET] by
[5:17:59 PM ET] trillions of
[5:17:59 PM ET] shopping, brand
[5:18:00 PM ET] and
[5:18:00 PM ET] streaming
[5:18:01 PM ET] backed by trillions of shopping browsing and streaming signals
[5:18:01 PM ET] signals,
[5:18:02 PM ET] it
[5:18:02 PM ET] supports
[5:18:03 PM ET] advertisers with
[5:18:03 PM ET] every
[5:18:04 PM ET] step
[5:18:04 PM ET] with
[5:18:05 PM ET] insights, answers,
[5:18:05 PM ET] and
[5:18:05 PM ET] the ability
[5:18:06 PM ET] to
[5:18:06 PM ET] it supports advertisers at every step with insights answers
[5:18:06 PM ET] optimize
[5:18:07 PM ET] and act
[5:18:07 PM ET] on
[5:18:07 PM ET] their
[5:18:08 PM ET] and the ability to optimize and act on their behalf
[5:18:09 PM ET] behalf.
[5:18:09 PM ET] We also
[5:18:09 PM ET] launched
[5:18:10 PM ET] full
[5:18:10 PM ET] funnel
[5:18:11 PM ET] campaigns
[5:18:11 PM ET] in
[5:18:11 PM ET] Amazon
[5:18:12 PM ET] Ads
[5:18:12 PM ET] we also launched full funnel campaigns in amazon ads agent
[5:18:12 PM ET] Agent,
[5:18:13 PM ET] bringing
[5:18:13 PM ET] sponsored
[5:18:13 PM ET] ads
[5:18:14 PM ET] display, video, and
[5:18:15 PM ET] streaming
[5:18:16 PM ET] TV into
[5:18:16 PM ET] a
[5:18:16 PM ET] single
[5:18:17 PM ET] bringing sponsored ads display video and streaming tv into a single campaign
[5:18:18 PM ET] campaign.
[5:18:18 PM ET] Advertisers
[5:18:19 PM ET] provide
[5:18:19 PM ET] initial
[5:18:19 PM ET] inputs
[5:18:20 PM ET] including
[5:18:20 PM ET] budget and
[5:18:21 PM ET] advertisers provide initial inputs including budget and duration
[5:18:22 PM ET] duration.
[5:18:22 PM ET] and
[5:18:22 PM ET] Amazon's AI.
[5:18:24 PM ET] plans.
[5:18:24 PM ET] executes and
[5:18:25 PM ET] continually
[5:18:25 PM ET] optimizes
[5:18:26 PM ET] the
[5:18:26 PM ET] and amazon's ai plans executes and continually optimizes the rest
[5:18:26 PM ET] rest.
[5:18:28 PM ET] We're
[5:18:28 PM ET] continuing to
[5:18:28 PM ET] see
[5:18:29 PM ET] momentum
[5:18:29 PM ET] in
[5:18:29 PM ET] several
[5:18:29 PM ET] other
[5:18:30 PM ET] areas.
[5:18:30 PM ET] I'll mention just a few
[5:18:31 PM ET] we're continuing to see momentum in several other areas i'll mention just a few
[5:18:32 PM ET] prime
[5:18:32 PM ET] Video is
[5:18:33 PM ET] has
[5:18:33 PM ET] emerged as
[5:18:33 PM ET] a
[5:18:34 PM ET] significant
[5:18:34 PM ET] business
[5:18:34 PM ET] with
[5:18:35 PM ET] a
[5:18:35 PM ET] revenue
[5:18:35 PM ET] run
[5:18:35 PM ET] rate in
[5:18:36 PM ET] the ten
[5:18:36 PM ET] tens of billions
[5:18:36 PM ET] prime video has emerged as a significant business
[5:18:36 PM ET] of
[5:18:37 PM ET] dollars and
[5:18:38 PM ET] now
[5:18:38 PM ET] profitable
[5:18:38 PM ET] in
[5:18:38 PM ET] its
[5:18:39 PM ET] own
[5:18:39 PM ET] with a revenue run rate in the tens of billions of dollars and now profitable in its own right
[5:18:40 PM ET] right.
[5:18:40 PM ET] We have momentum
[5:18:40 PM ET] with
[5:18:41 PM ET] hit
[5:18:41 PM ET] shows
[5:18:41 PM ET] like
[5:18:42 PM ET] Carrie,
[5:18:42 PM ET] The
[5:18:42 PM ET] Summer I
[5:18:42 PM ET] Turn
[5:18:43 PM ET] Pretty,
[5:18:43 PM ET] The
[5:18:43 PM ET] Boys,
[5:18:44 PM ET] Off
[5:18:44 PM ET] we have momentum with hit shows like carrie the summer i turned pretty the boys
[5:18:44 PM ET] Campus,
[5:18:45 PM ET] Reacher and
[5:18:46 PM ET] off campus reacher and fallout
[5:18:46 PM ET] fallout
[5:18:47 PM ET] and
[5:18:47 PM ET] breakout
[5:18:47 PM ET] movies
[5:18:48 PM ET] like
[5:18:48 PM ET] Project
[5:18:48 PM ET] Hail
[5:18:49 PM ET] Mary along
[5:18:49 PM ET] with
[5:18:49 PM ET] compelling
[5:18:50 PM ET] live
[5:18:50 PM ET] sports.
[5:18:50 PM ET] including the
[5:18:51 PM ET] and breakout movies like project hail mary along with
[5:18:51 PM ET] Thursday
[5:18:51 PM ET] night
[5:18:52 PM ET] football, off
[5:18:52 PM ET] to
[5:18:52 PM ET] its
[5:18:53 PM ET] best
[5:18:53 PM ET] start
[5:18:53 PM ET] ever in
[5:18:54 PM ET] compelling live sports including thursday night football off to its best start ever in twenty twenty six
[5:18:55 PM ET] 2026.
[5:18:55 PM ET] NBA
[5:18:55 PM ET] on
[5:18:56 PM ET] nba on prime
[5:18:56 PM ET] Prime,
[5:18:57 PM ET] nascar
[5:18:57 PM ET] NASCAR, the
[5:18:58 PM ET] Masters, and
[5:18:59 PM ET] UEFA
[5:18:59 PM ET] Champions
[5:19:00 PM ET] League
[5:19:00 PM ET] the masters and uefa champions league soccer
[5:19:01 PM ET] Soccer.
[5:19:01 PM ET] We
[5:19:02 PM ET] recently
[5:19:02 PM ET] launched our most
[5:19:03 PM ET] powerful
[5:19:03 PM ET] devices one of the most
[5:19:04 PM ET] lineup
[5:19:04 PM ET] we recently launched our most powerful devices lineup yet
[5:19:05 PM ET] yet
[5:19:05 PM ET] with
[5:19:05 PM ET] 34
[5:19:05 PM ET] new products.
[5:19:07 PM ET] across
[5:19:07 PM ET] Echo,
[5:19:07 PM ET] Kindle, Alexa,
[5:19:08 PM ET] Tablets,
[5:19:09 PM ET] Fire
[5:19:09 PM ET] with thirty four new products across echo kindle alexa tablets
[5:19:09 PM ET] TV,
[5:19:10 PM ET] Ring and
[5:19:10 PM ET] B.
[5:19:10 PM ET] fire tv ring and bee
[5:19:11 PM ET] It's
[5:19:11 PM ET] early,
[5:19:11 PM ET] but
[5:19:11 PM ET] we're
[5:19:12 PM ET] off to
[5:19:12 PM ET] a
[5:19:12 PM ET] very
[5:19:13 PM ET] strong
[5:19:13 PM ET] start and
[5:19:14 PM ET] excited for
[5:19:14 PM ET] more
[5:19:15 PM ET] customers to get their
[5:19:15 PM ET] hands
[5:19:15 PM ET] on
[5:19:15 PM ET] it's early but we're off to a very strong start and
[5:19:16 PM ET] excited for more customers to get their hands on these
[5:19:16 PM ET] these as we
[5:19:17 PM ET] head into the
[5:19:17 PM ET] as we head into the holidays
[5:19:18 PM ET] holidays.
[5:19:19 PM ET] And finally,
[5:19:19 PM ET] Amazon
[5:19:19 PM ET] Leo
[5:19:20 PM ET] remains
[5:19:20 PM ET] on
[5:19:20 PM ET] track
[5:19:21 PM ET] to begin
[5:19:21 PM ET] an
[5:19:21 PM ET] initial
[5:19:22 PM ET] service this
[5:19:22 PM ET] and finally amazon leo remains on track to begin initial service this year
[5:19:23 PM ET] year.
[5:19:24 PM ET] We're heading
[5:19:24 PM ET] into
[5:19:24 PM ET] one of
[5:19:25 PM ET] our
[5:19:25 PM ET] most
[5:19:25 PM ET] exciting
[5:19:26 PM ET] stretches of the
[5:19:26 PM ET] year
[5:19:27 PM ET] with
[5:19:27 PM ET] both
[5:19:27 PM ET] reInvent
[5:19:27 PM ET] and the
[5:19:27 PM ET] we're heading into one of our most exciting
[5:19:28 PM ET] stretches of the year with both re:invent and the holidays
[5:19:28 PM ET] holidays.
[5:19:29 PM ET] And I want to
[5:19:29 PM ET] thank
[5:19:29 PM ET] our
[5:19:30 PM ET] teammates for
[5:19:30 PM ET] their hard
[5:19:31 PM ET] work and
[5:19:31 PM ET] invention
[5:19:31 PM ET] to
[5:19:32 PM ET] make
[5:19:32 PM ET] customers
[5:19:32 PM ET] lives
[5:19:33 PM ET] better and
[5:19:33 PM ET] easier every
[5:19:33 PM ET] day.
[5:19:33 PM ET] and i want to thank our teammates for their hard work and invention to make customers' lives
[5:19:34 PM ET] better and easier every day
[5:19:34 PM ET] day.
[5:19:35 PM ET] What we're
[5:19:35 PM ET] building
[5:19:36 PM ET] at
[5:19:36 PM ET] Amazon
[5:19:36 PM ET] is unlikely to
[5:19:37 PM ET] anything
[5:19:37 PM ET] that's ever
[5:19:38 PM ET] been seen
[5:19:39 PM ET] what we're building at amazon is unlike anything that's ever been seen before
[5:19:39 PM ET] before.
[5:19:40 PM ET] There has
[5:19:40 PM ET] never been
[5:19:40 PM ET] a
[5:19:41 PM ET] there has never been a business
[5:19:41 PM ET] business with a
[5:19:42 PM ET] trillion
[5:19:42 PM ET] dollars
[5:19:42 PM ET] of
[5:19:43 PM ET] annual
[5:19:43 PM ET] with a trillion dollars of annual revenue
[5:19:43 PM ET] revenue.
[5:19:44 PM ET] Amazon is on
[5:19:44 PM ET] a
[5:19:45 PM ET] path to
[5:19:45 PM ET] have two
[5:19:45 PM ET] of
[5:19:46 PM ET] them in
[5:19:46 PM ET] AWS
[5:19:46 PM ET] and
[5:19:47 PM ET] amazon is on a path to have two of them in aws and stores
[5:19:47 PM ET] stores.
[5:19:48 PM ET] It's
[5:19:48 PM ET] rare, and
[5:19:48 PM ET] we're
[5:19:49 PM ET] energized
[5:19:49 PM ET] by
[5:19:49 PM ET] what we're
[5:19:49 PM ET] what's
[5:19:50 PM ET] it's rare and we're energized by what's ahead
[5:19:50 PM ET] ahead.
[5:19:50 PM ET] Over to you,
[5:19:51 PM ET] over to you brian
[5:19:51 PM ET] Brian.
[5:19:52 PM ET] Thank
[5:19:52 PM ET] you,
[5:19:52 PM ET] thank you andy
[5:19:53 PM ET] Andy.
[5:19:53 PM ET] Let's start
[5:19:53 PM ET] with our
[5:19:54 PM ET] top
[5:19:54 PM ET] line
[5:19:54 PM ET] financial
[5:19:55 PM ET] let's start with our top line financial results
[5:19:56 PM ET] results.
[5:19:56 PM ET] Worldwide
[5:19:56 PM ET] revenue
[5:19:57 PM ET] is
[5:19:57 PM ET] was
[5:19:58 PM ET] $201.9
[5:19:59 PM ET] billion.
[5:19:59 PM ET] a 12%
[5:20:00 PM ET] increase
[5:20:00 PM ET] worldwide revenue was two hundred and one point nine billion dollars
[5:20:00 PM ET] year over
[5:20:01 PM ET] a twelve percent increase year over year
[5:20:01 PM ET] and
[5:20:01 PM ET] 13%
[5:20:02 PM ET] increase year over
[5:20:03 PM ET] year excluding
[5:20:04 PM ET] the impact of the
[5:20:04 PM ET] foreign
[5:20:05 PM ET] and thirteen percent increase year over year excluding the impact of foreign exchange
[5:20:05 PM ET] exchange.
[5:20:06 PM ET] Worldwide
[5:20:07 PM ET] operating
[5:20:07 PM ET] income
[5:20:07 PM ET] was
[5:20:08 PM ET] $28.1
[5:20:09 PM ET] one billion
[5:20:09 PM ET] worldwide operating income was twenty eight point one billion dollars
[5:20:09 PM ET] with an operating
[5:20:10 PM ET] margin of
[5:20:11 PM ET] $13.5
[5:20:12 PM ET] point nine
[5:20:12 PM ET] with an operating margin of thirteen point nine percent
[5:20:12 PM ET] which
[5:20:13 PM ET] is our
[5:20:13 PM ET] highest
[5:20:13 PM ET] operating
[5:20:14 PM ET] margin
[5:20:15 PM ET] which is our highest operating margin ever
[5:20:15 PM ET] ever.
[5:20:16 PM ET] Starting with
[5:20:16 PM ET] our
[5:20:16 PM ET] north
[5:20:17 PM ET] American
[5:20:17 PM ET] international
[5:20:17 PM ET] segment
[5:20:18 PM ET] starting with our north american international segment results
[5:20:19 PM ET] results.
[5:20:19 PM ET] first let me
[5:20:20 PM ET] remind you
[5:20:20 PM ET] the
[5:20:20 PM ET] Prime-Base
[5:20:21 PM ET] Base shifted
[5:20:21 PM ET] this
[5:20:22 PM ET] year with
[5:20:22 PM ET] the
[5:20:22 PM ET] sales
[5:20:22 PM ET] event
[5:20:23 PM ET] occurring
[5:20:23 PM ET] in
[5:20:23 PM ET] first let me remind you that prime day shifted this year
[5:20:24 PM ET] Q2 for
[5:20:24 PM ET] most of
[5:20:24 PM ET] our
[5:20:25 PM ET] largest
[5:20:25 PM ET] countries,
[5:20:25 PM ET] including
[5:20:26 PM ET] the
[5:20:26 PM ET] United
[5:20:26 PM ET] with the sales event occurring in q2 for most of our large
[5:20:27 PM ET] largest countries including the united states
[5:20:27 PM ET] States.
[5:20:28 PM ET] In
[5:20:28 PM ET] 2025,
[5:20:28 PM ET] prime
[5:20:29 PM ET] Day
[5:20:29 PM ET] was
[5:20:29 PM ET] entirely in
[5:20:30 PM ET] in twenty twenty five prime day was entirely in q3
[5:20:31 PM ET] Q3.
[5:20:32 PM ET] excluding
[5:20:32 PM ET] the
[5:20:32 PM ET] impact of
[5:20:33 PM ET] this prime
[5:20:33 PM ET] excluding the impact of this prime day
[5:20:33 PM ET] day
[5:20:34 PM ET] time
[5:20:35 PM ET] change.
[5:20:35 PM ET] time change
[5:20:35 PM ET] third
[5:20:36 PM ET] quarter
[5:20:36 PM ET] 2026
[5:20:37 PM ET] year-over-year
[5:20:37 PM ET] growth would
[5:20:37 PM ET] be
[5:20:38 PM ET] approximately
[5:20:39 PM ET] $400
[5:20:39 PM ET] basis
[5:20:39 PM ET] points
[5:20:40 PM ET] third quarter twenty twenty six year over year growth would be approximately four hundred basis
[5:20:40 PM ET] points higher
[5:20:40 PM ET] higher.
[5:20:41 PM ET] In
[5:20:42 PM ET] Q3, we
[5:20:42 PM ET] saw
[5:20:42 PM ET] strong
[5:20:42 PM ET] customer
[5:20:44 PM ET] in q3 we saw strong customer engagement
[5:20:44 PM ET] engagement and
[5:20:44 PM ET] a
[5:20:44 PM ET] continuation of
[5:20:45 PM ET] trends from
[5:20:45 PM ET] the
[5:20:45 PM ET] first
[5:20:46 PM ET] half of the
[5:20:46 PM ET] and a continuation of trends from the first half of the year
[5:20:47 PM ET] year.
[5:20:48 PM ET] In the North
[5:20:48 PM ET] America
[5:20:49 PM ET] in the north america segment
[5:20:49 PM ET] segment, third
[5:20:50 PM ET] quarter
[5:20:50 PM ET] revenue was
[5:20:51 PM ET] $112.9
[5:20:52 PM ET] billion.
[5:20:52 PM ET] third quarter revenue was one hundred and twelve point nine billion dollars
[5:20:53 PM ET] an increase
[5:20:53 PM ET] of
[5:20:54 PM ET] 6% year per
[5:20:54 PM ET] over
[5:20:54 PM ET] an increase of six percent year over year
[5:20:55 PM ET] year.
[5:20:56 PM ET] International
[5:20:57 PM ET] segment
[5:20:57 PM ET] revenue
[5:20:57 PM ET] is
[5:20:58 PM ET] $43.1
[5:20:59 PM ET] one billion
[5:20:59 PM ET] international segment revenue was forty three point one billion dollars
[5:21:00 PM ET] an increase
[5:21:00 PM ET] of $8.5
[5:21:01 PM ET] year-over
[5:21:01 PM ET] over
[5:21:01 PM ET] an increase of eight percent year over year
[5:21:02 PM ET] excluding
[5:21:02 PM ET] the impact
[5:21:03 PM ET] of
[5:21:03 PM ET] foreign
[5:21:04 PM ET] excluding the impact of foreign exchange
[5:21:04 PM ET] exchange.
[5:21:05 PM ET] Worldwide
[5:21:05 PM ET] paid
[5:21:06 PM ET] units
[5:21:06 PM ET] for 12
[5:21:07 PM ET] year over
[5:21:07 PM ET] worldwide paid units grew twelve percent year over year
[5:21:08 PM ET] year.
[5:21:08 PM ET] Prime
[5:21:09 PM ET] remains a
[5:21:09 PM ET] key
[5:21:09 PM ET] pillar of
[5:21:10 PM ET] our
[5:21:10 PM ET] prime remains a key pillar of our business
[5:21:11 PM ET] business.
[5:21:11 PM ET] Hundreds of millions
[5:21:12 PM ET] Prime
[5:21:12 PM ET] members
[5:21:12 PM ET] are responsible
[5:21:13 PM ET] to the
[5:21:13 PM ET] our
[5:21:13 PM ET] combination of
[5:21:14 PM ET] vast
[5:21:15 PM ET] hundreds of millions of prime members are responding to our combination of vast selection
[5:21:15 PM ET] selection,
[5:21:15 PM ET] low price, and the selection of the
[5:21:17 PM ET] prices, and record
[5:21:17 PM ET] delivery
[5:21:18 PM ET] low prices and record delivery speeds
[5:21:18 PM ET] speeds.
[5:21:19 PM ET] Over the
[5:21:19 PM ET] past
[5:21:19 PM ET] year,
[5:21:20 PM ET] monthly
[5:21:20 PM ET] orders
[5:21:20 PM ET] of
[5:21:20 PM ET] fresh
[5:21:21 PM ET] groceries placed in the
[5:21:21 PM ET] over the past year orders of fresh groceries
[5:21:22 PM ET] by
[5:21:22 PM ET] our prime
[5:21:23 PM ET] members
[5:21:23 PM ET] for
[5:21:23 PM ET] three
[5:21:23 PM ET] same
[5:21:23 PM ET] days.
[5:21:24 PM ET] delivery have
[5:21:24 PM ET] more
[5:21:25 PM ET] than
[5:21:25 PM ET] placed by our prime members for free same day delivery have more than tripled
[5:21:26 PM ET] tripled.
[5:21:26 PM ET] The shift to
[5:21:28 PM ET] let's shift to profitability
[5:21:28 PM ET] profitability.
[5:21:28 PM ET] North
[5:21:28 PM ET] America's
[5:21:29 PM ET] segment
[5:21:29 PM ET] operating
[5:21:29 PM ET] income
[5:21:30 PM ET] was eight
[5:21:30 PM ET] $8.7
[5:21:31 PM ET] seven billion
[5:21:31 PM ET] north america segment operating income was eight point seven billion dollars
[5:21:32 PM ET] with an
[5:21:32 PM ET] operating
[5:21:33 PM ET] margin of
[5:21:33 PM ET] $7
[5:21:33 PM ET] $7.5
[5:21:34 PM ET] point seven
[5:21:34 PM ET] with an operating margin of seven point seven percent
[5:21:36 PM ET] International
[5:21:36 PM ET] segment
[5:21:37 PM ET] operating
[5:21:37 PM ET] income was
[5:21:38 PM ET] $1.6
[5:21:39 PM ET] six billion
[5:21:39 PM ET] international segment operating income was one point six billion dollars
[5:21:39 PM ET] with an
[5:21:40 PM ET] operating
[5:21:40 PM ET] margin
[5:21:40 PM ET] of $3.5
[5:21:41 PM ET] $3.7
[5:21:42 PM ET] seven
[5:21:42 PM ET] with an operating margin of three point seven percent
[5:21:43 PM ET] In our
[5:21:43 PM ET] fulfillment
[5:21:44 PM ET] network, the
[5:21:44 PM ET] team
[5:21:44 PM ET] navigated
[5:21:45 PM ET] higher
[5:21:46 PM ET] transportation
[5:21:46 PM ET] costs
[5:21:46 PM ET] in our fulfillment network the team navigated higher transportation costs
[5:21:47 PM ET] from
[5:21:47 PM ET] fuel
[5:21:48 PM ET] inflation and
[5:21:48 PM ET] higher
[5:21:48 PM ET] line
[5:21:49 PM ET] haul
[5:21:49 PM ET] from fuel inflation and higher line haul rates
[5:21:50 PM ET] rates.
[5:21:50 PM ET] even with
[5:21:51 PM ET] these
[5:21:51 PM ET] headwinds, we still have to do
[5:21:52 PM ET] lowered our
[5:21:53 PM ET] overall
[5:21:53 PM ET] cost of
[5:21:53 PM ET] to
[5:21:53 PM ET] serve
[5:21:54 PM ET] in
[5:21:54 PM ET] Q
[5:21:54 PM ET] even with these headwinds we still lowered our overall cost to serve in q3
[5:21:55 PM ET] through
[5:21:55 PM ET] better
[5:21:55 PM ET] inventory
[5:21:56 PM ET] through better inventory placement
[5:21:57 PM ET] placement,
[5:21:57 PM ET] shorter
[5:21:57 PM ET] shipping
[5:21:58 PM ET] distances,
[5:21:58 PM ET] and
[5:21:59 PM ET] package
[5:22:00 PM ET] shorter shipping distances and package consolidation
[5:22:00 PM ET] consolidation.
[5:22:01 PM ET] Shipping
[5:22:01 PM ET] costs
[5:22:02 PM ET] increased
[5:22:02 PM ET] 11%
[5:22:03 PM ET] year over
[5:22:03 PM ET] shipping costs increased eleven percent year over year
[5:22:04 PM ET] year versus
[5:22:04 PM ET] a 12% per
[5:22:05 PM ET] increase in
[5:22:06 PM ET] versus a twelve percent increase in units
[5:22:06 PM ET] units.
[5:22:07 PM ET] excluding
[5:22:07 PM ET] fuel and
[5:22:07 PM ET] line
[5:22:08 PM ET] haul
[5:22:09 PM ET] inflation,
[5:22:09 PM ET] excluding fuel and line haul inflation
[5:22:09 PM ET] shipping costs, and the
[5:22:10 PM ET] grew
[5:22:10 PM ET] eight percent
[5:22:11 PM ET] or
[5:22:11 PM ET] approximately
[5:22:11 PM ET] four
[5:22:12 PM ET] basis
[5:22:12 PM ET] points
[5:22:12 PM ET] slower
[5:22:13 PM ET] than
[5:22:13 PM ET] unit
[5:22:14 PM ET] shipping costs grew eight percent or approximately four hundred basis points slower than unit growth
[5:22:14 PM ET] growth.
[5:22:15 PM ET] Robotics and
[5:22:16 PM ET] AI.
[5:22:16 PM ET] are delivering the
[5:22:17 PM ET] measurable
[5:22:18 PM ET] robotics and ai are delivering measurable gains
[5:22:18 PM ET] gains.
[5:22:18 PM ET] in
[5:22:18 PM ET] productivity
[5:22:19 PM ET] and
[5:22:19 PM ET] employee
[5:22:20 PM ET] in productivity and employee safety
[5:22:20 PM ET] safety, which
[5:22:21 PM ET] we'll
[5:22:21 PM ET] expect
[5:22:21 PM ET] to
[5:22:22 PM ET] compound in the
[5:22:22 PM ET] which we'll expect to compound in the future
[5:22:23 PM ET] future.
[5:22:24 PM ET] In
[5:22:24 PM ET] twenty twenty
[5:22:24 PM ET] we
[5:22:25 PM ET] doubled
[5:22:25 PM ET] our fleet
[5:22:25 PM ET] of
[5:22:25 PM ET] robotic
[5:22:26 PM ET] arms
[5:22:26 PM ET] like
[5:22:27 PM ET] Cardinal and
[5:22:27 PM ET] in twenty twenty six we doubled our fleet of robotic arms like cardinal and sparrow
[5:22:28 PM ET] Sparrow. We're
[5:22:28 PM ET] also
[5:22:29 PM ET] developing robotic
[5:22:30 PM ET] foundation
[5:22:31 PM ET] we're also developing robotics foundation models
[5:22:31 PM ET] models
[5:22:31 PM ET] that
[5:22:32 PM ET] enable
[5:22:32 PM ET] faster
[5:22:33 PM ET] programming
[5:22:33 PM ET] and
[5:22:33 PM ET] teach robotics.
[5:22:34 PM ET] robots
[5:22:35 PM ET] increasingly
[5:22:35 PM ET] complex
[5:22:35 PM ET] physical
[5:22:36 PM ET] that enable faster programming and teach robots increasingly complex
[5:22:37 PM ET] physical tasks
[5:22:37 PM ET] tasks with
[5:22:37 PM ET] the
[5:22:37 PM ET] goal
[5:22:37 PM ET] of
[5:22:38 PM ET] delivering
[5:22:39 PM ET] useful robotic
[5:22:39 PM ET] at
[5:22:40 PM ET] with the goal of delivering useful robotics at scale
[5:22:41 PM ET] scale.
[5:22:41 PM ET] Looking
[5:22:41 PM ET] ahead, we
[5:22:41 PM ET] see
[5:22:42 PM ET] meaningful
[5:22:43 PM ET] opportunities to
[5:22:43 PM ET] improve
[5:22:44 PM ET] looking ahead we see meaningful opportunities to improve productivity
[5:22:44 PM ET] productivity
[5:22:45 PM ET] across
[5:22:45 PM ET] our
[5:22:45 PM ET] global
[5:22:46 PM ET] fulfillment
[5:22:46 PM ET] across our global fulfillment network
[5:22:47 PM ET] network.
[5:22:47 PM ET] and
[5:22:47 PM ET] lower
[5:22:47 PM ET] our
[5:22:47 PM ET] cost to
[5:22:48 PM ET] and lower our cost to serve
[5:22:48 PM ET] serve.
[5:22:49 PM ET] while continuing to
[5:22:50 PM ET] get products
[5:22:50 PM ET] to
[5:22:51 PM ET] customers
[5:22:51 PM ET] while continuing to get products to customers faster
[5:22:52 PM ET] faster.
[5:22:52 PM ET] Our
[5:22:53 PM ET] operating
[5:22:53 PM ET] margins are
[5:22:53 PM ET] fluctuate
[5:22:54 PM ET] quarter
[5:22:54 PM ET] to
[5:22:55 PM ET] quarter, but we're going to be able to do
[5:22:55 PM ET] focused on the
[5:22:56 PM ET] sustained
[5:22:56 PM ET] our operating margin may fluctuate quarter to quarter
[5:22:57 PM ET] long-term
[5:22:57 PM ET] improvement in
[5:22:58 PM ET] our
[5:22:58 PM ET] cost
[5:22:58 PM ET] to
[5:22:58 PM ET] serve per
[5:22:59 PM ET] but we're focused on sustained long term improvement in our cost to serve per unit
[5:23:00 PM ET] unit.
[5:23:00 PM ET] Moving to our
[5:23:01 PM ET] AWS
[5:23:02 PM ET] moving to our aws segment
[5:23:02 PM ET] segment.
[5:23:02 PM ET] revenue
[5:23:02 PM ET] is
[5:23:03 PM ET] $46
[5:23:04 PM ET] six billion
[5:23:04 PM ET] and grew
[5:23:05 PM ET] $39.6
[5:23:06 PM ET] point three
[5:23:06 PM ET] year
[5:23:06 PM ET] over
[5:23:07 PM ET] revenue was forty six billion dollars and grew thirty nine point three percent year over year
[5:23:07 PM ET] year.
[5:23:07 PM ET] driven
[5:23:07 PM ET] by
[5:23:08 PM ET] both
[5:23:08 PM ET] core
[5:23:08 PM ET] and AI.
[5:23:10 PM ET] driven by both core and ai services
[5:23:10 PM ET] services.
[5:23:11 PM ET] We added
[5:23:11 PM ET] three
[5:23:11 PM ET] 3.8
[5:23:12 PM ET] billion
[5:23:12 PM ET] in
[5:23:12 PM ET] quarter over the
[5:23:13 PM ET] quarter
[5:23:14 PM ET] we added three point eight billion dollars in quarter over quarter revenue
[5:23:14 PM ET] revenue.
[5:23:15 PM ET] AWS
[5:23:15 PM ET] now
[5:23:15 PM ET] has
[5:23:15 PM ET] an
[5:23:15 PM ET] annualized
[5:23:16 PM ET] revenue
[5:23:16 PM ET] run
[5:23:16 PM ET] rate
[5:23:17 PM ET] of
[5:23:17 PM ET] $184
[5:23:18 PM ET] billion.
[5:23:19 PM ET] aws now has an annualized revenue run rate of one hundred and eighty four billion dollars
[5:23:20 PM ET] Customers
[5:23:20 PM ET] continue
[5:23:20 PM ET] to
[5:23:21 PM ET] move
[5:23:21 PM ET] the
[5:23:21 PM ET] cloud
[5:23:21 PM ET] and
[5:23:22 PM ET] scale
[5:23:22 PM ET] their
[5:23:22 PM ET] use of
[5:23:23 PM ET] AWS
[5:23:23 PM ET] core
[5:23:23 PM ET] customers continue to move to the cloud and scale their use of aws
[5:23:24 PM ET] core services
[5:23:25 PM ET] services and
[5:23:26 PM ET] increasingly
[5:23:26 PM ET] customers
[5:23:26 PM ET] who want
[5:23:26 PM ET] the
[5:23:27 PM ET] full benefit of the
[5:23:27 PM ET] AI.
[5:23:28 PM ET] and increasingly customers who want the full benefits of ai
[5:23:28 PM ET] are
[5:23:29 PM ET] accelerating
[5:23:29 PM ET] their
[5:23:29 PM ET] transition
[5:23:30 PM ET] to the
[5:23:30 PM ET] are accelerating their transition to the cloud
[5:23:31 PM ET] cloud.
[5:23:32 PM ET] We see a
[5:23:32 PM ET] strong
[5:23:32 PM ET] linkage
[5:23:33 PM ET] between AI
[5:23:33 PM ET] spec and the
[5:23:34 PM ET] spend
[5:23:34 PM ET] we see a strong linkage between ai spend
[5:23:34 PM ET] growth in
[5:23:34 PM ET] our
[5:23:35 PM ET] revenue
[5:23:35 PM ET] for
[5:23:35 PM ET] core
[5:23:36 PM ET] and growth in our revenue for core services
[5:23:37 PM ET] services.
[5:23:37 PM ET] As customers invest in the
[5:23:38 PM ET] AI,
[5:23:38 PM ET] as customers invest in ai
[5:23:38 PM ET] we
[5:23:39 PM ET] see
[5:23:39 PM ET] a
[5:23:39 PM ET] corresponding
[5:23:40 PM ET] increase
[5:23:40 PM ET] in core
[5:23:41 PM ET] we see a corresponding increase in core consumption
[5:23:41 PM ET] consumption.
[5:23:42 PM ET] and we
[5:23:42 PM ET] expect
[5:23:42 PM ET] that
[5:23:43 PM ET] relationship
[5:23:43 PM ET] to
[5:23:44 PM ET] and we expect that relationship to strengthen
[5:23:44 PM ET] strengthen
[5:23:44 PM ET] as
[5:23:44 PM ET] more AI
[5:23:45 PM ET] workloads
[5:23:45 PM ET] move
[5:23:45 PM ET] into
[5:23:46 PM ET] as more ai workloads move into production
[5:23:47 PM ET] production and
[5:23:47 PM ET] drive
[5:23:47 PM ET] additional
[5:23:48 PM ET] demand
[5:23:48 PM ET] for
[5:23:49 PM ET] compute
[5:23:49 PM ET] storage and
[5:23:50 PM ET] and drive additional demand for compute storage and networking
[5:23:50 PM ET] networking.
[5:23:51 PM ET] AWS
[5:23:52 PM ET] operating
[5:23:52 PM ET] income
[5:23:53 PM ET] was
[5:23:53 PM ET] 17% of the
[5:23:54 PM ET] point eight
[5:23:54 PM ET] with an operating
[5:23:55 PM ET] aws operating income was seventeen point eight billion dollars
[5:23:55 PM ET] margin
[5:23:55 PM ET] of
[5:23:56 PM ET] $38.6
[5:23:57 PM ET] point seven
[5:23:57 PM ET] with an operating margin of thirty eight point seven percent
[5:23:57 PM ET] percent.
[5:23:58 PM ET] reflecting
[5:23:58 PM ET] strong
[5:23:59 PM ET] growth and
[5:23:59 PM ET] our focus on the
[5:24:00 PM ET] driving
[5:24:01 PM ET] reflecting strong growth and our focus on driving efficiencies
[5:24:02 PM ET] efficiencies.
[5:24:04 PM ET] Our investments
[5:24:04 PM ET] in custom chips
[5:24:04 PM ET] and
[5:24:04 PM ET] custom
[5:24:05 PM ET] our investments in custom chips and custom networking
[5:24:05 PM ET] networking will
[5:24:06 PM ET] along with
[5:24:06 PM ET] software
[5:24:06 PM ET] and
[5:24:07 PM ET] process
[5:24:08 PM ET] improvements
[5:24:08 PM ET] along with software and process improvements
[5:24:08 PM ET] are helping
[5:24:08 PM ET] us
[5:24:09 PM ET] optimize
[5:24:10 PM ET] capacity
[5:24:10 PM ET] are helping us optimize capacity
[5:24:10 PM ET] and build
[5:24:10 PM ET] a
[5:24:10 PM ET] more
[5:24:11 PM ET] cost-efficient
[5:24:12 PM ET] build a more cost efficient infrastructure
[5:24:12 PM ET] infrastructure.
[5:24:13 PM ET] As we've
[5:24:13 PM ET] long
[5:24:13 PM ET] said, we
[5:24:14 PM ET] expect
[5:24:14 PM ET] AWS
[5:24:15 PM ET] operating
[5:24:15 PM ET] margins
[5:24:15 PM ET] to
[5:24:16 PM ET] as we've long said we expect aws operating margins to fluctuate
[5:24:16 PM ET] fluctuate.
[5:24:17 PM ET] driven in
[5:24:17 PM ET] part by
[5:24:17 PM ET] the level
[5:24:18 PM ET] of
[5:24:18 PM ET] investment we're
[5:24:19 PM ET] making at any
[5:24:19 PM ET] point in
[5:24:20 PM ET] driven in part by the level of investment we're making at any point in time
[5:24:20 PM ET] time.
[5:24:21 PM ET] Our AI
[5:24:21 PM ET] offerings are
[5:24:22 PM ET] gaining
[5:24:22 PM ET] traction
[5:24:22 PM ET] with
[5:24:23 PM ET] our ai offerings are gaining traction with customers
[5:24:23 PM ET] customers.
[5:24:24 PM ET] with AI
[5:24:24 PM ET] revenue
[5:24:25 PM ET] growing
[5:24:25 PM ET] triple
[5:24:26 PM ET] digits year over
[5:24:26 PM ET] ai revenue growing triple digits year over year
[5:24:27 PM ET] year.
[5:24:27 PM ET] Bedrock has been a
[5:24:28 PM ET] significant
[5:24:28 PM ET] growth
[5:24:29 PM ET] bedrock has been a significant growth driver
[5:24:30 PM ET] driver.
[5:24:30 PM ET] Now, turning to
[5:24:30 PM ET] our
[5:24:31 PM ET] cash
[5:24:31 PM ET] cap
[5:24:32 PM ET] now turning to our cash capex
[5:24:32 PM ET] which
[5:24:32 PM ET] was
[5:24:32 PM ET] 75%
[5:24:34 PM ET] billion
[5:24:34 PM ET] in
[5:24:35 PM ET] which was seventy five point nine billion dollars in q3
[5:24:35 PM ET] Q3.
[5:24:36 PM ET] this
[5:24:36 PM ET] primarily
[5:24:36 PM ET] relates to
[5:24:37 PM ET] AWS
[5:24:37 PM ET] and
[5:24:38 PM ET] AI.
[5:24:38 PM ET] this primarily relates to aws and ai
[5:24:39 PM ET] as we
[5:24:39 PM ET] invest in the
[5:24:40 PM ET] to support
[5:24:40 PM ET] strong
[5:24:40 PM ET] customer
[5:24:41 PM ET] as we invest to support strong customer demand
[5:24:42 PM ET] demand.
[5:24:42 PM ET] We
[5:24:42 PM ET] continue to
[5:24:43 PM ET] make
[5:24:43 PM ET] significant
[5:24:44 PM ET] investments,
[5:24:44 PM ET] especially
[5:24:45 PM ET] in AI.
[5:24:46 PM ET] we continue to make significant investments especially in ai
[5:24:46 PM ET] as
[5:24:46 PM ET] we believe it's a very important
[5:24:46 PM ET] to be
[5:24:47 PM ET] massive
[5:24:48 PM ET] opportunity
[5:24:48 PM ET] as we believe it to be a massive opportunity
[5:24:48 PM ET] with the
[5:24:49 PM ET] potential
[5:24:49 PM ET] to
[5:24:49 PM ET] drive
[5:24:50 PM ET] long-term
[5:24:50 PM ET] revenue
[5:24:51 PM ET] and
[5:24:51 PM ET] free
[5:24:51 PM ET] cash
[5:24:52 PM ET] the potential to drive long term revenue and free cash flow
[5:24:52 PM ET] flow as
[5:24:52 PM ET] well return to the
[5:24:53 PM ET] on
[5:24:53 PM ET] invested
[5:24:54 PM ET] as well as return on invested capital
[5:24:55 PM ET] capital.
[5:24:55 PM ET] I'll finish
[5:24:55 PM ET] with
[5:24:55 PM ET] our
[5:24:56 PM ET] financial
[5:24:56 PM ET] guidance
[5:24:56 PM ET] for
[5:24:57 PM ET] Q
[5:24:57 PM ET] i'll finish with our financial guidance for q4
[5:24:58 PM ET] Q4
[5:24:58 PM ET] net sales
[5:24:59 PM ET] were
[5:24:59 PM ET] are
[5:24:59 PM ET] expected to
[5:25:00 PM ET] be
[5:25:00 PM ET] between 200 and 200 to
[5:25:01 PM ET] and
[5:25:02 PM ET] billion and $24
[5:25:02 PM ET] q4 net sales are expected to be between two hundred
[5:25:02 PM ET] $240
[5:25:04 PM ET] billion.
[5:25:04 PM ET] forty billion dollars and two forty seven billion dollars
[5:25:05 PM ET] dollars. We
[5:25:05 PM ET] estimate
[5:25:05 PM ET] the
[5:25:06 PM ET] year-over-year
[5:25:06 PM ET] impact of
[5:25:06 PM ET] changes in the
[5:25:07 PM ET] foreign
[5:25:08 PM ET] exchange
[5:25:08 PM ET] rates based
[5:25:09 PM ET] on
[5:25:09 PM ET] current
[5:25:09 PM ET] we estimate the year over year impact of changes in
[5:25:10 PM ET] foreign exchange rates based on current rates
[5:25:10 PM ET] rates, which would
[5:25:10 PM ET] we
[5:25:11 PM ET] expect to be ahead
[5:25:11 PM ET] headwind
[5:25:11 PM ET] of
[5:25:12 PM ET] approximately
[5:25:13 PM ET] 60
[5:25:13 PM ET] basis
[5:25:14 PM ET] points in the
[5:25:14 PM ET] which we expect to be a headwind of approximately sixty basis points in the quarter
[5:25:15 PM ET] quarter.
[5:25:16 PM ET] G4 operating
[5:25:17 PM ET] income is
[5:25:17 PM ET] expected
[5:25:17 PM ET] to
[5:25:18 PM ET] be
[5:25:18 PM ET] between
[5:25:19 PM ET] $28.5
[5:25:19 PM ET] q4 operating income is expected to be between twenty eight point five
[5:25:20 PM ET] five billion
[5:25:20 PM ET] billion dollars
[5:25:20 PM ET] and $5
[5:25:21 PM ET] $33.5
[5:25:22 PM ET] point five billion
[5:25:22 PM ET] and thirty three point five billion dollars
[5:25:23 PM ET] dollars
[5:25:24 PM ET] I'll mention
[5:25:24 PM ET] one
[5:25:24 PM ET] factor
[5:25:25 PM ET] impacting
[5:25:25 PM ET] our
[5:25:25 PM ET] Q4
[5:25:26 PM ET] i'll mention one factor impacting our q4 guidance
[5:25:26 PM ET] guidance.
[5:25:27 PM ET] Amazon
[5:25:28 PM ET] Leo's
[5:25:28 PM ET] commercial
[5:25:28 PM ET] service is
[5:25:29 PM ET] on
[5:25:29 PM ET] track
[5:25:29 PM ET] to
[5:25:29 PM ET] begin a
[5:25:30 PM ET] initial
[5:25:30 PM ET] service this
[5:25:31 PM ET] amazon leo's commercial service is on track to begin initial service this year
[5:25:31 PM ET] year.
[5:25:32 PM ET] and we
[5:25:32 PM ET] expect to
[5:25:33 PM ET] begin
[5:25:33 PM ET] capitalizing
[5:25:34 PM ET] certain
[5:25:34 PM ET] costs in
[5:25:35 PM ET] Q1
[5:25:35 PM ET] of next
[5:25:36 PM ET] and we expect to begin capitalizing certain costs in q1 of next year
[5:25:36 PM ET] year.
[5:25:36 PM ET] including
[5:25:37 PM ET] production
[5:25:37 PM ET] and
[5:25:37 PM ET] launch
[5:25:38 PM ET] including production and launch costs
[5:25:39 PM ET] costs.
[5:25:39 PM ET] This is later
[5:25:40 PM ET] than I've
[5:25:40 PM ET] been
[5:25:40 PM ET] predicting in
[5:25:41 PM ET] earlier
[5:25:41 PM ET] earnings
[5:25:42 PM ET] this is later than i've been predicting in earlier earnings calls
[5:25:42 PM ET] calls.
[5:25:43 PM ET] As a
[5:25:43 PM ET] result,
[5:25:43 PM ET] we
[5:25:43 PM ET] will
[5:25:44 PM ET] continue
[5:25:44 PM ET] to
[5:25:44 PM ET] expense the majority of
[5:25:45 PM ET] our
[5:25:45 PM ET] LEO
[5:25:46 PM ET] related
[5:25:46 PM ET] costs in
[5:25:47 PM ET] Q
[5:25:47 PM ET] as a result we will continue to expense the majority of leo related costs
[5:25:47 PM ET] in q4
[5:25:48 PM ET] We're ready
[5:25:48 PM ET] to
[5:25:49 PM ET] serve
[5:25:49 PM ET] customers the
[5:25:49 PM ET] this holiday
[5:25:50 PM ET] we're ready to serve customers this holiday season
[5:25:50 PM ET] season and
[5:25:51 PM ET] to support the
[5:25:51 PM ET] millions of
[5:25:52 PM ET] customers
[5:25:52 PM ET] building
[5:25:53 PM ET] with
[5:25:54 PM ET] and to support the millions of customers building with aws
[5:25:54 PM ET] AWS.
[5:25:55 PM ET] I want to
[5:25:55 PM ET] thank
[5:25:55 PM ET] our
[5:25:55 PM ET] teams
[5:25:55 PM ET] across
[5:25:56 PM ET] Amazon for the next
[5:25:56 PM ET] hard
[5:25:57 PM ET] work
[5:25:57 PM ET] and
[5:25:57 PM ET] focus
[5:25:57 PM ET] on
[5:25:58 PM ET] i want to thank our teams across amazon for their hard work and focus on customers
[5:25:59 PM ET] customers.
[5:25:59 PM ET] Our commitment
[5:25:59 PM ET] to
[5:26:00 PM ET] elevating
[5:26:00 PM ET] the
[5:26:00 PM ET] customer
[5:26:01 PM ET] our commitment to elevating the customer experience
[5:26:01 PM ET] experience
[5:26:02 PM ET] remains the only way to do
[5:26:02 PM ET] reliable
[5:26:03 PM ET] way to
[5:26:03 PM ET] create
[5:26:04 PM ET] lasting
[5:26:04 PM ET] value for
[5:26:04 PM ET] our
[5:26:05 PM ET] remains the only reliable way to create lasting value for our shareholders
[5:26:06 PM ET] shareholders.
[5:26:06 PM ET] With
[5:26:06 PM ET] that,
[5:26:07 PM ET] let's move on
[5:26:07 PM ET] to
[5:26:07 PM ET] your
[5:26:08 PM ET] with that let's move on to your questions
[5:26:08 PM ET] questions.
[5:26:12 PM ET] Thank
[5:26:13 PM ET] you.
[5:26:14 PM ET] At this time, we will
[5:26:14 PM ET] now open
[5:26:14 PM ET] the
[5:26:15 PM ET] call
[5:26:15 PM ET] up
[5:26:15 PM ET] for
[5:26:17 PM ET] questions.
[5:26:17 PM ET] thank you at this time we will now open the call up for questions
[5:26:17 PM ET] We ask
[5:26:17 PM ET] each
[5:26:17 PM ET] caller
[5:26:18 PM ET] to
[5:26:18 PM ET] please limit
[5:26:19 PM ET] yourself
[5:26:19 PM ET] to
[5:26:19 PM ET] one
[5:26:20 PM ET] question.
[5:26:21 PM ET] we ask each caller to please limit yourself to one question
[5:26:21 PM ET] If you would like to
[5:26:21 PM ET] ask a
[5:26:22 PM ET] question,
[5:26:22 PM ET] please
[5:26:22 PM ET] press
[5:26:23 PM ET] star
[5:26:23 PM ET] one on
[5:26:23 PM ET] your
[5:26:24 PM ET] keypad we
[5:26:25 PM ET] ask
[5:26:25 PM ET] that when
[5:26:25 PM ET] you
[5:26:25 PM ET] pose
[5:26:26 PM ET] your
[5:26:26 PM ET] question, you
[5:26:27 PM ET] pick up
[5:26:27 PM ET] your
[5:26:27 PM ET] handsets
[5:26:28 PM ET] to
[5:26:28 PM ET] provide
[5:26:29 PM ET] optimum
[5:26:29 PM ET] sound
[5:26:30 PM ET] quality.
[5:26:31 PM ET] Once
[5:26:31 PM ET] again, to
[5:26:32 PM ET] initiate a
[5:26:33 PM ET] question,
[5:26:33 PM ET] please
[5:26:33 PM ET] press
[5:26:34 PM ET] star, then
[5:26:35 PM ET] one on
[5:26:35 PM ET] your
[5:26:35 PM ET] touch
[5:26:35 PM ET] tone
[5:26:36 PM ET] telephone at
[5:26:36 PM ET] this
[5:26:38 PM ET] time.
[5:26:38 PM ET] Please
[5:26:39 PM ET] hold what
[5:26:39 PM ET] we pull
[5:26:39 PM ET] for
[5:26:40 PM ET] questions. Thank
[5:26:41 PM ET] you.
[5:26:46 PM ET] Okay, so I'm going to go ahead and do
[5:26:50 PM ET] And our
[5:26:50 PM ET] first
[5:26:50 PM ET] question
[5:26:51 PM ET] comes from the
[5:26:52 PM ET] the
[5:26:52 PM ET] line
[5:26:53 PM ET] of
[5:26:53 PM ET] Justin
[5:26:54 PM ET] Post with
[5:26:54 PM ET] and our first question comes from the line of justin post
[5:26:54 PM ET] Bank of
[5:26:56 PM ET] with bank of america
[5:26:56 PM ET] America.
[5:26:57 PM ET] Please
[5:26:57 PM ET] proceed with
[5:26:57 PM ET] your
[5:26:58 PM ET] please proceed with your question
[5:26:58 PM ET] question.
[5:26:59 PM ET] Great. Thank
[5:27:00 PM ET] you.
[5:27:00 PM ET] um
[5:27:01 PM ET] andy can
[5:27:01 PM ET] you just
[5:27:01 PM ET] see
[5:27:02 PM ET] the
[5:27:02 PM ET] cloud
[5:27:02 PM ET] business
[5:27:04 PM ET] andy could you just see the cloud business accelerate
[5:27:04 PM ET] accelerate, which
[5:27:04 PM ET] is really
[5:27:05 PM ET] nice but the
[5:27:06 PM ET] quarter over
[5:27:06 PM ET] quarter growth slowed
[5:27:08 PM ET] And I just
[5:27:08 PM ET] wondering if
[5:27:08 PM ET] there's
[5:27:08 PM ET] which is really nice but the quarter over quarter growth slowed
[5:27:08 PM ET] any
[5:27:09 PM ET] call
[5:27:09 PM ET] outs
[5:27:09 PM ET] there on
[5:27:10 PM ET] the
[5:27:10 PM ET] customer
[5:27:10 PM ET] side
[5:27:11 PM ET] or
[5:27:11 PM ET] token
[5:27:12 PM ET] costs or
[5:27:12 PM ET] anything
[5:27:12 PM ET] and i'm just wondering if there's any call outs there on the customer side or token costs
[5:27:12 PM ET] that kind
[5:27:13 PM ET] of
[5:27:13 PM ET] drove
[5:27:14 PM ET] that.
[5:27:14 PM ET] and how you
[5:27:15 PM ET] think about
[5:27:15 PM ET] the
[5:27:16 PM ET] capacity adds
[5:27:16 PM ET] in
[5:27:16 PM ET] or anything that kind of drove that and how you're thinking about
[5:27:17 PM ET] Q4.
[5:27:18 PM ET] And then Brian,
[5:27:18 PM ET] maybe
[5:27:18 PM ET] just
[5:27:19 PM ET] any
[5:27:19 PM ET] impact
[5:27:19 PM ET] of fuel
[5:27:20 PM ET] capacity adds in q4 and then brian maybe just any impact of fuel costs
[5:27:20 PM ET] costs on
[5:27:20 PM ET] your
[5:27:21 PM ET] guidance
[5:27:21 PM ET] and
[5:27:22 PM ET] Q4. Thank
[5:27:22 PM ET] on your guidance in q4 thank you
[5:27:23 PM ET] you.
[5:27:24 PM ET] Yeah.
[5:27:25 PM ET] I'll start
[5:27:25 PM ET] with the
[5:27:26 PM ET] growth
[5:27:26 PM ET] question.
[5:27:27 PM ET] We're really
[5:27:27 PM ET] pleased with the
[5:27:27 PM ET] yes i'll start with the growth question we're really pleased with
[5:27:28 PM ET] growth.
[5:27:29 PM ET] You know,
[5:27:29 PM ET] 39.3
[5:27:30 PM ET] on a
[5:27:31 PM ET] business
[5:27:31 PM ET] that's
[5:27:31 PM ET] got
[5:27:32 PM ET] a
[5:27:32 PM ET] hundred
[5:27:32 PM ET] the growth thirty nine point three percent on a business
[5:27:33 PM ET] $184
[5:27:33 PM ET] billion.
[5:27:33 PM ET] got one hundred and eighty four billion dollars
[5:27:34 PM ET] annual
[5:27:34 PM ET] revenue
[5:27:35 PM ET] run
[5:27:35 PM ET] rate is quite a
[5:27:36 PM ET] unusual.
[5:27:37 PM ET] or our
[5:27:37 PM ET] fastest
[5:27:37 PM ET] growth in
[5:27:38 PM ET] about
[5:27:38 PM ET] five
[5:27:38 PM ET] years or six
[5:27:38 PM ET] annual revenue run rate is quite unusual our fastest growth
[5:27:39 PM ET] in about five years or six
[5:27:40 PM ET] quarter
[5:27:41 PM ET] consecutively
[5:27:41 PM ET] of
[5:27:42 PM ET] acceleration.
[5:27:44 PM ET] And you know,
[5:27:44 PM ET] quarter consecutively of acceleration
[5:27:44 PM ET] we're
[5:27:45 PM ET] adding a lot
[5:27:45 PM ET] quite of
[5:27:46 PM ET] bit
[5:27:46 PM ET] a of
[5:27:47 PM ET] and we're adding
[5:27:47 PM ET] capacity i think if
[5:27:48 PM ET] you
[5:27:48 PM ET] look
[5:27:48 PM ET] at
[5:27:49 PM ET] what's
[5:27:50 PM ET] driving
[5:27:50 PM ET] the growth of
[5:27:50 PM ET] right
[5:27:50 PM ET] quite a bit of capacity think if you look at
[5:27:51 PM ET] now,
[5:27:51 PM ET] it's
[5:27:51 PM ET] a
[5:27:52 PM ET] combination
[5:27:52 PM ET] a few
[5:27:53 PM ET] things you know
[5:27:54 PM ET] what's driving the growth right now it's a combination of a few things
[5:27:54 PM ET] first
[5:27:55 PM ET] on the AI.
[5:27:56 PM ET] side,
[5:27:56 PM ET] the
[5:27:57 PM ET] unusual
[5:27:58 PM ET] top to
[5:27:58 PM ET] first on the ai side the
[5:27:58 PM ET] bottom
[5:27:59 PM ET] static
[5:27:59 PM ET] functionality we
[5:28:00 PM ET] have, whether
[5:28:00 PM ET] the unusual top to bottom stack functionality we have whether you're
[5:28:01 PM ET] you're
[5:28:01 PM ET] building your
[5:28:01 PM ET] own
[5:28:02 PM ET] building your own model
[5:28:03 PM ET] model.
[5:28:03 PM ET] with
[5:28:04 PM ET] SageMaker
[5:28:04 PM ET] AI.
[5:28:04 PM ET] which
[5:28:04 PM ET] is
[5:28:05 PM ET] the
[5:28:05 PM ET] easiest way to do
[5:28:05 PM ET] build your
[5:28:06 PM ET] own
[5:28:07 PM ET] model.
[5:28:07 PM ET] or you
[5:28:07 PM ET] want to
[5:28:07 PM ET] with sagemaker ai which is the easiest way to build your own model
[5:28:08 PM ET] leverage
[5:28:08 PM ET] one
[5:28:08 PM ET] of
[5:28:08 PM ET] the
[5:28:08 PM ET] leading
[5:28:09 PM ET] frontier
[5:28:09 PM ET] models
[5:28:10 PM ET] with
[5:28:10 PM ET] high
[5:28:11 PM ET] security
[5:28:11 PM ET] and
[5:28:11 PM ET] very
[5:28:11 PM ET] or you wanna leverage one of the leading frontier models with
[5:28:12 PM ET] strong
[5:28:12 PM ET] price
[5:28:13 PM ET] performance.
[5:28:14 PM ET] you know people
[5:28:14 PM ET] can use
[5:28:14 PM ET] bedrock.
[5:28:15 PM ET] high security and very strong price performance people can use bedrock
[5:28:16 PM ET] Whether
[5:28:16 PM ET] you
[5:28:17 PM ET] whether you are
[5:28:17 PM ET] are
[5:28:18 PM ET] a
[5:28:18 PM ET] building
[5:28:18 PM ET] your
[5:28:19 PM ET] own
[5:28:19 PM ET] agents
[5:28:19 PM ET] where
[5:28:20 PM ET] we
[5:28:20 PM ET] have
[5:28:21 PM ET] capabilities
[5:28:21 PM ET] like
[5:28:22 PM ET] strands
[5:28:22 PM ET] and
[5:28:22 PM ET] agent
[5:28:22 PM ET] core
[5:28:22 PM ET] building your own agents where we have capabilities like
[5:28:23 PM ET] to
[5:28:23 PM ET] build and
[5:28:23 PM ET] to
[5:28:24 PM ET] run
[5:28:24 PM ET] those
[5:28:24 PM ET] securely
[5:28:25 PM ET] and
[5:28:26 PM ET] scalably
[5:28:26 PM ET] or are you going
[5:28:26 PM ET] strands and agent core to build and to run those securely and scalably
[5:28:26 PM ET] to
[5:28:26 PM ET] use
[5:28:27 PM ET] turnkey
[5:28:27 PM ET] agents
[5:28:28 PM ET] which
[5:28:28 PM ET] most
[5:28:28 PM ET] companies
[5:28:29 PM ET] do if
[5:28:29 PM ET] you
[5:28:29 PM ET] just
[5:28:29 PM ET] look
[5:28:30 PM ET] across
[5:28:31 PM ET] or you're gonna use turnkey agents which most companies do if you just look across
[5:28:31 PM ET] you know,
[5:28:31 PM ET] Kiro
[5:28:31 PM ET] for
[5:28:32 PM ET] coding
[5:28:32 PM ET] you know curo for coding and
[5:28:33 PM ET] and
[5:28:35 PM ET] connect
[5:28:35 PM ET] for the next
[5:28:36 PM ET] connect for
[5:28:36 PM ET] call
[5:28:37 PM ET] center and
[5:28:37 PM ET] transform
[5:28:37 PM ET] for
[5:28:38 PM ET] migration
[5:28:38 PM ET] and
[5:28:38 PM ET] quick
[5:28:39 PM ET] which is
[5:28:39 PM ET] growing
[5:28:40 PM ET] incredibly
[5:28:40 PM ET] call center and transform for migrations and quick which is growing incredibly fast
[5:28:41 PM ET] fast as an
[5:28:42 PM ET] AI
[5:28:42 PM ET] companion at
[5:28:43 PM ET] as an ai companion at work
[5:28:43 PM ET] work.
[5:28:44 PM ET] people
[5:28:44 PM ET] are
[5:28:45 PM ET] adopting
[5:28:45 PM ET] those
[5:28:45 PM ET] very
[5:28:46 PM ET] quickly
[5:28:46 PM ET] And then, you
[5:28:47 PM ET] know,
[5:28:47 PM ET] we add
[5:28:47 PM ET] a
[5:28:48 PM ET] lot of
[5:28:48 PM ET] people are adopting those very quickly and then you know we add a lot of
[5:28:49 PM ET] capacity
[5:28:49 PM ET] every
[5:28:49 PM ET] quarter now
[5:28:50 PM ET] the amount that
[5:28:50 PM ET] add to the capacity of the
[5:28:51 PM ET] every
[5:28:51 PM ET] quarter is
[5:28:52 PM ET] not
[5:28:53 PM ET] equal.
[5:28:53 PM ET] capacity every quarter now the amount that we add every quarter is not equal
[5:28:53 PM ET] and
[5:28:54 PM ET] and
[5:28:54 PM ET] um
[5:28:55 PM ET] you
[5:28:55 PM ET] know
[5:28:55 PM ET] we're
[5:28:55 PM ET] adding
[5:28:56 PM ET] different
[5:28:57 PM ET] amounts
[5:28:57 PM ET] each
[5:28:57 PM ET] quarter
[5:28:58 PM ET] but if I
[5:28:58 PM ET] look at
[5:28:58 PM ET] how much
[5:28:58 PM ET] we've
[5:28:59 PM ET] you know we're adding different amounts each
[5:28:59 PM ET] added
[5:28:59 PM ET] this
[5:29:00 PM ET] year and
[5:29:00 PM ET] what we
[5:29:01 PM ET] have
[5:29:01 PM ET] planned
[5:29:01 PM ET] over the
[5:29:02 PM ET] quarter but if i look at how much we've added this year
[5:29:02 PM ET] and what we have planned over the next
[5:29:02 PM ET] next
[5:29:03 PM ET] I'll call
[5:29:03 PM ET] it
[5:29:04 PM ET] um eight
[5:29:04 PM ET] quarters or
[5:29:05 PM ET] so you know
[5:29:06 PM ET] which is
[5:29:06 PM ET] about as
[5:29:06 PM ET] far
[5:29:07 PM ET] out
[5:29:07 PM ET] as we're
[5:29:07 PM ET] get
[5:29:07 PM ET] i'll call it eight quarters or so you know which
[5:29:07 PM ET] about as far out as we get eight
[5:29:08 PM ET] eight to
[5:29:08 PM ET] ten
[5:29:09 PM ET] quarters.
[5:29:09 PM ET] we have
[5:29:09 PM ET] a
[5:29:09 PM ET] lot
[5:29:10 PM ET] of
[5:29:10 PM ET] capacity
[5:29:10 PM ET] coming as
[5:29:11 PM ET] well.
[5:29:12 PM ET] and then you know
[5:29:12 PM ET] I
[5:29:12 PM ET] layer on top
[5:29:12 PM ET] to ten quarters we have a lot of capacity coming as well
[5:29:13 PM ET] of
[5:29:13 PM ET] that
[5:29:13 PM ET] too
[5:29:14 PM ET] just
[5:29:14 PM ET] the
[5:29:15 PM ET] impact
[5:29:15 PM ET] of
[5:29:16 PM ET] chips
[5:29:16 PM ET] and then i layer on top of that too just the impact of
[5:29:16 PM ET] where we're very
[5:29:16 PM ET] well
[5:29:18 PM ET] positioned
[5:29:18 PM ET] for what's
[5:29:19 PM ET] happening in AI.
[5:29:20 PM ET] chips we're we're very well positioned for what's happening in ai because
[5:29:20 PM ET] because
[5:29:21 PM ET] increasingly
[5:29:22 PM ET] what
[5:29:22 PM ET] you're finding is that
[5:29:22 PM ET] right
[5:29:23 PM ET] now
[5:29:24 PM ET] is
[5:29:24 PM ET] most
[5:29:24 PM ET] customers
[5:29:25 PM ET] every
[5:29:25 PM ET] increasingly what what you're finding right now is
[5:29:25 PM ET] customer
[5:29:25 PM ET] that
[5:29:26 PM ET] runs
[5:29:27 PM ET] that
[5:29:27 PM ET] uses
[5:29:27 PM ET] ai
[5:29:28 PM ET] at
[5:29:28 PM ET] is most customers every customer that runs that uses ai
[5:29:29 PM ET] scale.
[5:29:29 PM ET] scale
[5:29:29 PM ET] but
[5:29:30 PM ET] particularly
[5:29:31 PM ET] enterprises
[5:29:32 PM ET] now as
[5:29:32 PM ET] they're starting to
[5:29:33 PM ET] deploy
[5:29:33 PM ET] more
[5:29:34 PM ET] inference
[5:29:34 PM ET] but particularly enterprises now as their
[5:29:34 PM ET] into
[5:29:35 PM ET] production they
[5:29:35 PM ET] are
[5:29:35 PM ET] very
[5:29:36 PM ET] eager
[5:29:36 PM ET] to save
[5:29:36 PM ET] on
[5:29:37 PM ET] price
[5:29:37 PM ET] starting to deploy more inference into production they are very eager to save on price
[5:29:38 PM ET] performance.
[5:29:38 PM ET] and
[5:29:39 PM ET] tradium
[5:29:39 PM ET] performance and trainium
[5:29:39 PM ET] with
[5:29:39 PM ET] a
[5:29:40 PM ET] meaningful
[5:29:40 PM ET] advantage of having to be able
[5:29:40 PM ET] has in
[5:29:40 PM ET] price
[5:29:42 PM ET] performance
[5:29:42 PM ET] versus
[5:29:42 PM ET] other
[5:29:43 PM ET] alternatives is very
[5:29:44 PM ET] compelling to
[5:29:44 PM ET] a meaningful advantage it has in price performance versus other alternatives is very compelling
[5:29:45 PM ET] people.
[5:29:45 PM ET] and then as
[5:29:46 PM ET] more and
[5:29:46 PM ET] more
[5:29:47 PM ET] people and then as more and more people
[5:29:47 PM ET] people
[5:29:48 PM ET] are
[5:29:48 PM ET] using
[5:29:49 PM ET] AI.
[5:29:49 PM ET] in a
[5:29:50 PM ET] very broad
[5:29:51 PM ET] way.
[5:29:51 PM ET] it drives a lot
[5:29:51 PM ET] of
[5:29:51 PM ET] the
[5:29:52 PM ET] are using ai in a very broad way it drives a lot of the core
[5:29:53 PM ET] core
[5:29:53 PM ET] in
[5:29:54 PM ET] capabilities
[5:29:54 PM ET] like
[5:29:55 PM ET] reinforcement
[5:29:55 PM ET] learning
[5:29:55 PM ET] and
[5:29:56 PM ET] post-training
[5:29:56 PM ET] and
[5:29:56 PM ET] tool
[5:29:57 PM ET] in in capabilities like reinforcement learning and post training and tool calling
[5:29:57 PM ET] calling.
[5:29:58 PM ET] and we
[5:29:58 PM ET] have the
[5:29:58 PM ET] leading
[5:29:59 PM ET] CPU
[5:29:59 PM ET] chip in
[5:30:00 PM ET] Graviton.
[5:30:00 PM ET] which
[5:30:01 PM ET] is
[5:30:01 PM ET] about
[5:30:01 PM ET] 30 to
[5:30:02 PM ET] 40 percent
[5:30:02 PM ET] and we have the leading cpu chip in graviton
[5:30:02 PM ET] word
[5:30:02 PM ET] price
[5:30:03 PM ET] performant than
[5:30:03 PM ET] there are
[5:30:04 PM ET] other
[5:30:04 PM ET] X eighty
[5:30:04 PM ET] six.
[5:30:05 PM ET] which is about thirty to forty percent more price performance than their other x eighty six
[5:30:06 PM ET] providers.
[5:30:06 PM ET] providers so it's
[5:30:06 PM ET] So it's
[5:30:07 PM ET] those
[5:30:08 PM ET] things are really
[5:30:09 PM ET] driving
[5:30:09 PM ET] very
[5:30:09 PM ET] significant
[5:30:10 PM ET] growth.
[5:30:10 PM ET] those things are really driving very significant growth
[5:30:11 PM ET] The amount
[5:30:11 PM ET] of
[5:30:12 PM ET] capacity we
[5:30:12 PM ET] add
[5:30:12 PM ET] each
[5:30:12 PM ET] quarter
[5:30:13 PM ET] will
[5:30:13 PM ET] vary, but
[5:30:14 PM ET] we're
[5:30:14 PM ET] very I
[5:30:14 PM ET] mean
[5:30:15 PM ET] the amount of capacity we add each quarter will vary but we're i mean
[5:30:15 PM ET] at
[5:30:15 PM ET] this
[5:30:17 PM ET] scale to
[5:30:17 PM ET] at this scale
[5:30:17 PM ET] be
[5:30:18 PM ET] projecting
[5:30:18 PM ET] growing over
[5:30:19 PM ET] 40%
[5:30:20 PM ET] year over
[5:30:20 PM ET] year in each
[5:30:21 PM ET] of
[5:30:21 PM ET] be projecting growing over forty percent year over year in each of
[5:30:22 PM ET] 2027 and
[5:30:23 PM ET] 2028
[5:30:23 PM ET] is
[5:30:23 PM ET] pretty
[5:30:24 PM ET] significant.
[5:30:24 PM ET] and the fact that
[5:30:25 PM ET] we
[5:30:25 PM ET] believe
[5:30:25 PM ET] that
[5:30:25 PM ET] this can
[5:30:26 PM ET] be a
[5:30:26 PM ET] twenty twenty seven and twenty twenty eight is pretty significant
[5:30:26 PM ET] trillion
[5:30:26 PM ET] dollar
[5:30:27 PM ET] revenue
[5:30:27 PM ET] business
[5:30:28 PM ET] in five to ten
[5:30:29 PM ET] and the fact that we believe that this can be a one trillion dollars revenue business in five
[5:30:29 PM ET] years.
[5:30:29 PM ET] It's an
[5:30:30 PM ET] extraordinary,
[5:30:30 PM ET] unusual
[5:30:32 PM ET] ten years an extraordinary unusual opportunity
[5:30:32 PM ET] opportunity that we're going to be able to
[5:30:32 PM ET] very excited
[5:30:33 PM ET] to be
[5:30:34 PM ET] we're very excited to be pursuing
[5:30:34 PM ET] pursuing.
[5:30:36 PM ET] And Justin, on
[5:30:37 PM ET] your question about
[5:30:38 PM ET] fuel and if you have
[5:30:39 PM ET] justin on your question about fuel
[5:30:39 PM ET] line
[5:30:40 PM ET] linehole inflation.
[5:30:41 PM ET] I would
[5:30:41 PM ET] say I'm
[5:30:41 PM ET] looking
[5:30:42 PM ET] at Don
[5:30:43 PM ET] don't have an exact number for you,
[5:30:43 PM ET] and line haul inflation i would say i'm looking
[5:30:43 PM ET] but it
[5:30:43 PM ET] is
[5:30:44 PM ET] higher in
[5:30:44 PM ET] Q4 than it
[5:30:44 PM ET] was in
[5:30:46 PM ET] don't have an exact number for you but it is higher in q4 than it was in q3
[5:30:46 PM ET] q3
[5:30:46 PM ET] If
[5:30:46 PM ET] you
[5:30:46 PM ET] remember,
[5:30:47 PM ET] we
[5:30:47 PM ET] instituted a
[5:30:48 PM ET] fuel
[5:30:49 PM ET] surcharge in the
[5:30:49 PM ET] beginning of
[5:30:49 PM ET] the
[5:30:50 PM ET] year
[5:30:50 PM ET] for
[5:30:50 PM ET] if you remember we instituted a fuel surcharge
[5:30:51 PM ET] FBA
[5:30:51 PM ET] sellers.
[5:30:51 PM ET] that
[5:30:52 PM ET] recovers
[5:30:52 PM ET] at the beginning of the year for fba sellers that recovers
[5:30:52 PM ET] some
[5:30:53 PM ET] but not
[5:30:53 PM ET] all of
[5:30:54 PM ET] the
[5:30:54 PM ET] costs that
[5:30:55 PM ET] we're
[5:30:55 PM ET] seeing on
[5:30:55 PM ET] fuel
[5:30:56 PM ET] for for
[5:30:56 PM ET] those
[5:30:57 PM ET] shipments and then
[5:30:57 PM ET] some but not all of the costs that we're seeing on fuel for those shipments and then
[5:30:57 PM ET] the
[5:30:58 PM ET] remaining
[5:30:58 PM ET] remaining
[5:30:59 PM ET] part of the
[5:30:59 PM ET] is
[5:30:59 PM ET] on
[5:31:00 PM ET] retail
[5:31:01 PM ET] part is on the retail
[5:31:01 PM ET] inbound
[5:31:02 PM ET] shipments and
[5:31:03 PM ET] outbound
[5:31:03 PM ET] shipments.
[5:31:04 PM ET] So it's
[5:31:04 PM ET] in
[5:31:05 PM ET] there.
[5:31:05 PM ET] It's a little
[5:31:05 PM ET] bit
[5:31:05 PM ET] higher than
[5:31:06 PM ET] inbound shipments and outbound shipments it's in there it's a little bit higher than q3
[5:31:07 PM ET] Q3.
[5:31:10 PM ET] Thank
[5:31:11 PM ET] you.
[5:31:11 PM ET] Our next
[5:31:12 PM ET] question comes from
[5:31:12 PM ET] the
[5:31:12 PM ET] line
[5:31:13 PM ET] of
[5:31:13 PM ET] Brian
[5:31:14 PM ET] Nowak
[5:31:14 PM ET] with
[5:31:14 PM ET] Morgan
[5:31:15 PM ET] thank you our next question comes from the line of brian nowak
[5:31:15 PM ET] with morgan stanley
[5:31:15 PM ET] Stanley.
[5:31:16 PM ET] Please
[5:31:16 PM ET] proceed with
[5:31:16 PM ET] your
[5:31:17 PM ET] please proceed with your question
[5:31:18 PM ET] question.
[5:31:18 PM ET] Thanks,
[5:31:18 PM ET] for saying my
[5:31:19 PM ET] question
[5:31:19 PM ET] questions. I have
[5:31:20 PM ET] two
[5:31:20 PM ET] andy you're
[5:31:21 PM ET] you're
[5:31:22 PM ET] thanks for taking my questions i have two andy
[5:31:22 PM ET] your excitement about
[5:31:22 PM ET] AWS
[5:31:23 PM ET] has
[5:31:23 PM ET] is
[5:31:23 PM ET] coming through
[5:31:24 PM ET] the
[5:31:24 PM ET] line.
[5:31:25 PM ET] and it's
[5:31:25 PM ET] pretty
[5:31:26 PM ET] rare.
[5:31:26 PM ET] you would make
[5:31:26 PM ET] your excitement about aws is coming through the line and it's
[5:31:27 PM ET] comments
[5:31:27 PM ET] about
[5:31:27 PM ET] a you
[5:31:27 PM ET] know
[5:31:28 PM ET] trillion
[5:31:28 PM ET] dollars of
[5:31:29 PM ET] revenue
[5:31:29 PM ET] five to
[5:31:29 PM ET] it's pretty rare you'd make comments about a trillion dollars of revenue
[5:31:29 PM ET] ten
[5:31:30 PM ET] years from
[5:31:31 PM ET] now.
[5:31:32 PM ET] It's more than
[5:31:32 PM ET] usually
[5:31:33 PM ET] give.
[5:31:33 PM ET] so can you
[5:31:33 PM ET] just be
[5:31:34 PM ET] walk
[5:31:34 PM ET] us
[5:31:34 PM ET] five to ten years from now it's more than you usually give so
[5:31:35 PM ET] can you just maybe walk us through
[5:31:35 PM ET] through
[5:31:35 PM ET] how
[5:31:35 PM ET] you
[5:31:36 PM ET] get to
[5:31:36 PM ET] that
[5:31:36 PM ET] trillion of
[5:31:37 PM ET] dollars is
[5:31:37 PM ET] it
[5:31:37 PM ET] top
[5:31:38 PM ET] down
[5:31:38 PM ET] Is it
[5:31:38 PM ET] bottom
[5:31:38 PM ET] bottoms
[5:31:39 PM ET] up so what
[5:31:39 PM ET] gives
[5:31:39 PM ET] you
[5:31:40 PM ET] how you get to that trillion of dollars is it top down is it bottoms up so what gives you confidence
[5:31:40 PM ET] confidence
[5:31:40 PM ET] that you're going to
[5:31:40 PM ET] be able put
[5:31:41 PM ET] up
[5:31:41 PM ET] that
[5:31:41 PM ET] type
[5:31:41 PM ET] of
[5:31:42 PM ET] revenue
[5:31:42 PM ET] growth
[5:31:42 PM ET] in
[5:31:43 PM ET] to get to
[5:31:43 PM ET] that type
[5:31:43 PM ET] of
[5:31:44 PM ET] number in the
[5:31:44 PM ET] next
[5:31:45 PM ET] five to
[5:31:45 PM ET] you're going to be able to put up that type of revenue growth to get to that type of number in the
[5:31:45 PM ET] ten
[5:31:46 PM ET] years.
[5:31:46 PM ET] Then the second one,
[5:31:47 PM ET] just
[5:31:47 PM ET] for for
[5:31:47 PM ET] either of
[5:31:48 PM ET] you on the
[5:31:48 PM ET] robotic
[5:31:49 PM ET] five to ten years then the second one just for either of you
[5:31:49 PM ET] side
[5:31:49 PM ET] as
[5:31:50 PM ET] we look
[5:31:50 PM ET] into
[5:31:51 PM ET] 27 what
[5:31:52 PM ET] are
[5:31:52 PM ET] the
[5:31:52 PM ET] key
[5:31:53 PM ET] milestones
[5:31:53 PM ET] you're
[5:31:53 PM ET] on the robotics side as we look into twenty seven
[5:31:53 PM ET] both focused
[5:31:54 PM ET] on on
[5:31:54 PM ET] the
[5:31:55 PM ET] robotics?
[5:31:55 PM ET] side for
[5:31:56 PM ET] the
[5:31:56 PM ET] retail
[5:31:56 PM ET] what are the key milestones you're both focused on the robotics side for the retail
[5:31:57 PM ET] business
[5:31:57 PM ET] business.
[5:31:59 PM ET] Yeah, on the
[5:31:59 PM ET] AWS
[5:32:00 PM ET] side, you
[5:32:00 PM ET] know it's
[5:32:01 PM ET] if just look
[5:32:01 PM ET] at the
[5:32:01 PM ET] yes on the aws side
[5:32:02 PM ET] growth
[5:32:02 PM ET] rates,
[5:32:03 PM ET] Brian,
[5:32:03 PM ET] you
[5:32:03 PM ET] look
[5:32:04 PM ET] at the growth
[5:32:05 PM ET] rates on the
[5:32:05 PM ET] if you just look at the growth rates brian
[5:32:05 PM ET] run
[5:32:06 PM ET] rate and
[5:32:06 PM ET] then look
[5:32:06 PM ET] at
[5:32:06 PM ET] what
[5:32:07 PM ET] we're
[5:32:08 PM ET] look at the growth rates on the run rate and then look at what we're projecting
[5:32:08 PM ET] projecting
[5:32:08 PM ET] in
[5:32:09 PM ET] 27
[5:32:09 PM ET] and
[5:32:10 PM ET] twenty
[5:32:11 PM ET] I think it's a very good idea.
[5:32:11 PM ET] And
[5:32:11 PM ET] as I've
[5:32:12 PM ET] said a
[5:32:12 PM ET] few
[5:32:13 PM ET] times you
[5:32:13 PM ET] in twenty twenty seven and twenty twenty eight and as i've said a few times
[5:32:13 PM ET] know,
[5:32:14 PM ET] we
[5:32:14 PM ET] will
[5:32:15 PM ET] we will always
[5:32:15 PM ET] always
[5:32:16 PM ET] despite
[5:32:16 PM ET] how
[5:32:16 PM ET] much
[5:32:17 PM ET] capacity
[5:32:17 PM ET] we're
[5:32:18 PM ET] despite how much capacity we're providing
[5:32:18 PM ET] providing,
[5:32:19 PM ET] we, you
[5:32:19 PM ET] know,
[5:32:19 PM ET] the
[5:32:20 PM ET] big
[5:32:20 PM ET] chunks
[5:32:20 PM ET] of
[5:32:21 PM ET] capacity
[5:32:21 PM ET] that
[5:32:21 PM ET] people
[5:32:22 PM ET] take
[5:32:22 PM ET] that you know
[5:32:22 PM ET] the
[5:32:23 PM ET] hundreds
[5:32:23 PM ET] of millions
[5:32:23 PM ET] the big chunks of capacity that people
[5:32:24 PM ET] megawatts or
[5:32:24 PM ET] sometimes up
[5:32:25 PM ET] to a
[5:32:25 PM ET] gigawatt of
[5:32:26 PM ET] capacity.
[5:32:26 PM ET] take the hundreds of megawatts or sometimes up to a gigawatt of capacity
[5:32:27 PM ET] those
[5:32:27 PM ET] big
[5:32:28 PM ET] chunks
[5:32:28 PM ET] are
[5:32:29 PM ET] reserved
[5:32:29 PM ET] well in a
[5:32:30 PM ET] advance
[5:32:30 PM ET] because you know you
[5:32:31 PM ET] can't
[5:32:31 PM ET] leave
[5:32:31 PM ET] a
[5:32:31 PM ET] gigawatt of
[5:32:31 PM ET] those big chunks are reserved well in advance
[5:32:32 PM ET] capacity hanging
[5:32:33 PM ET] around and
[5:32:34 PM ET] so we
[5:32:34 PM ET] have very
[5:32:34 PM ET] cause you can't leave a gigawatt of capacity hanging around
[5:32:35 PM ET] good
[5:32:35 PM ET] visibility
[5:32:36 PM ET] into
[5:32:37 PM ET] 27
[5:32:37 PM ET] and
[5:32:38 PM ET] 28 and so
[5:32:38 PM ET] some
[5:32:38 PM ET] and so we have very good visibility into twenty twenty seven and twenty twenty eight
[5:32:38 PM ET] of
[5:32:38 PM ET] twenty
[5:32:39 PM ET] 29
[5:32:40 PM ET] too.
[5:32:40 PM ET] with
[5:32:40 PM ET] respect
[5:32:41 PM ET] to what we're
[5:32:42 PM ET] customers
[5:32:42 PM ET] want in
[5:32:43 PM ET] those
[5:32:43 PM ET] some of twenty nine too with respect to what
[5:32:43 PM ET] really
[5:32:43 PM ET] big
[5:32:43 PM ET] chunks
[5:32:44 PM ET] of
[5:32:45 PM ET] capacity.
[5:32:45 PM ET] We will
[5:32:46 PM ET] always
[5:32:46 PM ET] customers want in those really big chunks of capacity
[5:32:46 PM ET] leave
[5:32:46 PM ET] a fair bit of a lot
[5:32:47 PM ET] capacity
[5:32:48 PM ET] available
[5:32:48 PM ET] for
[5:32:49 PM ET] on-demand on
[5:32:49 PM ET] we will always leave a fair bit of capacity available for on demand on ecg
[5:32:49 PM ET] EC2
[5:32:50 PM ET] or
[5:32:50 PM ET] in bedrock.
[5:32:51 PM ET] and we're
[5:32:51 PM ET] in
[5:32:51 PM ET] working closely with
[5:32:52 PM ET] our
[5:32:52 PM ET] customers and they'll
[5:32:53 PM ET] have plenty of
[5:32:53 PM ET] capacity
[5:32:54 PM ET] to
[5:32:54 PM ET] be able to
[5:32:54 PM ET] two or in bedrock we're working closely with our customers and they'll have plenty of capacity to
[5:32:54 PM ET] use an
[5:32:55 PM ET] AWS.
[5:32:56 PM ET] But we
[5:32:56 PM ET] have
[5:32:56 PM ET] very
[5:32:57 PM ET] good
[5:32:58 PM ET] visibility
[5:32:58 PM ET] into the
[5:32:58 PM ET] next
[5:32:58 PM ET] be able to use in aws but we have very good visibility into the next
[5:32:59 PM ET] few
[5:32:59 PM ET] years of
[5:33:00 PM ET] what
[5:33:00 PM ET] AWS will
[5:33:00 PM ET] looks
[5:33:01 PM ET] like.
[5:33:01 PM ET] those types
[5:33:02 PM ET] of
[5:33:02 PM ET] growth
[5:33:02 PM ET] rates, when you
[5:33:03 PM ET] do the
[5:33:03 PM ET] few years of what aws looks like those types
[5:33:04 PM ET] math
[5:33:04 PM ET] on
[5:33:04 PM ET] the on the
[5:33:05 PM ET] revenue
[5:33:05 PM ET] and the
[5:33:05 PM ET] revenue
[5:33:06 PM ET] run
[5:33:06 PM ET] rate we
[5:33:07 PM ET] of growth rates when you do the math on revenue and the revenue run rate we have
[5:33:07 PM ET] have gets
[5:33:08 PM ET] you
[5:33:08 PM ET] get you
[5:33:08 PM ET] pretty
[5:33:09 PM ET] quickly
[5:33:09 PM ET] to
[5:33:10 PM ET] escalating
[5:33:10 PM ET] numbers.
[5:33:11 PM ET] And
[5:33:11 PM ET] pretty quickly to escalating numbers and then
[5:33:11 PM ET] then
[5:33:12 PM ET] I'd
[5:33:12 PM ET] say
[5:33:13 PM ET] that on top of
[5:33:14 PM ET] not
[5:33:14 PM ET] believing
[5:33:15 PM ET] that a lot of people are not going to be able to do
[5:33:15 PM ET] of
[5:33:15 PM ET] the
[5:33:16 PM ET] usage
[5:33:16 PM ET] we
[5:33:16 PM ET] see
[5:33:16 PM ET] i'd say that on top of not believing that a lot of the usage we
[5:33:17 PM ET] today is going
[5:33:17 PM ET] to
[5:33:18 PM ET] attenuate any
[5:33:18 PM ET] anytime
[5:33:19 PM ET] soon.
[5:33:19 PM ET] see today is gonna attenuate anytime soon
[5:33:20 PM ET] we're
[5:33:20 PM ET] still
[5:33:21 PM ET] really
[5:33:22 PM ET] we're still really early
[5:33:22 PM ET] early.
[5:33:22 PM ET] in
[5:33:23 PM ET] enterprises
[5:33:23 PM ET] using
[5:33:24 PM ET] inference in
[5:33:24 PM ET] their
[5:33:25 PM ET] production
[5:33:25 PM ET] applications in
[5:33:26 PM ET] a
[5:33:26 PM ET] pervasive
[5:33:27 PM ET] in enterprises using inference in their production
[5:33:27 PM ET] way.
[5:33:27 PM ET] It's just
[5:33:27 PM ET] it is
[5:33:28 PM ET] just
[5:33:28 PM ET] really
[5:33:29 PM ET] early. And some of
[5:33:29 PM ET] that
[5:33:30 PM ET] applications in a pervasive way it's just it is just really early and some of that is
[5:33:30 PM ET] is
[5:33:31 PM ET] enterprises
[5:33:31 PM ET] having
[5:33:32 PM ET] enough
[5:33:32 PM ET] people
[5:33:32 PM ET] who who
[5:33:33 PM ET] know
[5:33:33 PM ET] how
[5:33:33 PM ET] to
[5:33:34 PM ET] operate in
[5:33:34 PM ET] an
[5:33:34 PM ET] AI
[5:33:35 PM ET] and
[5:33:35 PM ET] post-train and
[5:33:35 PM ET] enterprises having enough people who who know how to operate in ai and post trade and find
[5:33:36 PM ET] fine-tune
[5:33:36 PM ET] models for the right
[5:33:38 PM ET] applications.
[5:33:39 PM ET] Some of it is a
[5:33:39 PM ET] the cost
[5:33:39 PM ET] of
[5:33:40 PM ET] inference.
[5:33:40 PM ET] you know i think if
[5:33:40 PM ET] tune models for the right applications some of it is the cost of inference
[5:33:41 PM ET] we
[5:33:41 PM ET] all
[5:33:42 PM ET] watch
[5:33:42 PM ET] enterprises to be
[5:33:43 PM ET] able
[5:33:43 PM ET] use
[5:33:44 PM ET] inference the
[5:33:44 PM ET] way
[5:33:44 PM ET] we
[5:33:44 PM ET] all
[5:33:44 PM ET] you know i think if we all want enterprises to be able to use inference
[5:33:45 PM ET] believe they
[5:33:45 PM ET] will.
[5:33:46 PM ET] we have
[5:33:46 PM ET] to
[5:33:46 PM ET] keep
[5:33:47 PM ET] working
[5:33:47 PM ET] on
[5:33:47 PM ET] taking the
[5:33:48 PM ET] cost of
[5:33:48 PM ET] infant
[5:33:48 PM ET] the way we all believe they will we have to keep working on taking the cost of inference
[5:33:49 PM ET] down.
[5:33:49 PM ET] That is a
[5:33:50 PM ET] huge
[5:33:50 PM ET] mission
[5:33:50 PM ET] for AI.
[5:33:51 PM ET] AWS.
[5:33:52 PM ET] It's one of the
[5:33:52 PM ET] significant
[5:33:53 PM ET] reasons
[5:33:53 PM ET] down that is a huge mission for aws it's one of the significant reasons
[5:33:54 PM ET] why
[5:33:54 PM ET] we're
[5:33:54 PM ET] building our
[5:33:54 PM ET] own
[5:33:55 PM ET] custom
[5:33:55 PM ET] silicon and
[5:33:56 PM ET] tranium is
[5:33:56 PM ET] that
[5:33:56 PM ET] we
[5:33:57 PM ET] just
[5:33:57 PM ET] really
[5:33:57 PM ET] believe
[5:33:58 PM ET] it's
[5:33:58 PM ET] why we're building our own custom silicon in trainium is that we we just really believe it's
[5:33:58 PM ET] incredibly
[5:33:59 PM ET] important
[5:33:59 PM ET] for
[5:34:00 PM ET] customers to
[5:34:00 PM ET] be able use
[5:34:00 PM ET] to
[5:34:01 PM ET] inference in
[5:34:01 PM ET] a much
[5:34:02 PM ET] more cost effective
[5:34:03 PM ET] incredibly important for customers to be able to use inference in a much more cost effective way
[5:34:03 PM ET] way.
[5:34:03 PM ET] That has come
[5:34:04 PM ET] down a
[5:34:05 PM ET] lot.
[5:34:05 PM ET] the cost of
[5:34:05 PM ET] inference
[5:34:06 PM ET] over the
[5:34:07 PM ET] that has come down a lot the cost of inference over the last
[5:34:07 PM ET] last
[5:34:08 PM ET] uh
[5:34:08 PM ET] couple
[5:34:09 PM ET] years and I
[5:34:09 PM ET] think it will
[5:34:09 PM ET] come
[5:34:10 PM ET] down
[5:34:10 PM ET] meaningfully
[5:34:11 PM ET] more.
[5:34:11 PM ET] And
[5:34:12 PM ET] couple of years and i think it will come down meaningfully more
[5:34:12 PM ET] so, you know,
[5:34:12 PM ET] and then you
[5:34:12 PM ET] just
[5:34:13 PM ET] think about
[5:34:13 PM ET] then you just think about
[5:34:14 PM ET] just think
[5:34:14 PM ET] about what
[5:34:14 PM ET] you're
[5:34:15 PM ET] seeing.
[5:34:16 PM ET] uh you know if you think
[5:34:16 PM ET] about
[5:34:17 PM ET] security
[5:34:17 PM ET] as an
[5:34:18 PM ET] example, just by
[5:34:18 PM ET] just think about what you're seeing you know if you think about
[5:34:20 PM ET] itself
[5:34:20 PM ET] the
[5:34:20 PM ET] models
[5:34:21 PM ET] today are not a
[5:34:21 PM ET] so
[5:34:21 PM ET] security as an example just by itself the models today are
[5:34:22 PM ET] advanced that
[5:34:23 PM ET] the
[5:34:23 PM ET] vulnerabilities
[5:34:24 PM ET] that
[5:34:24 PM ET] they're
[5:34:25 PM ET] so advanced that the vulnerabilities that they're finding
[5:34:25 PM ET] finding
[5:34:25 PM ET] humans
[5:34:26 PM ET] just
[5:34:26 PM ET] haven't
[5:34:27 PM ET] found.
[5:34:28 PM ET] And if
[5:34:28 PM ET] you've
[5:34:28 PM ET] had
[5:34:29 PM ET] access to
[5:34:29 PM ET] these
[5:34:30 PM ET] models, it
[5:34:30 PM ET] humans just haven't found and if you've had access to these models
[5:34:30 PM ET] leads
[5:34:30 PM ET] to
[5:34:31 PM ET] you're
[5:34:31 PM ET] using these
[5:34:32 PM ET] models
[5:34:32 PM ET] to both
[5:34:32 PM ET] find
[5:34:33 PM ET] them
[5:34:33 PM ET] and
[5:34:33 PM ET] ultimately
[5:34:34 PM ET] to
[5:34:34 PM ET] help
[5:34:34 PM ET] with
[5:34:34 PM ET] patching
[5:34:34 PM ET] it leads to you're using these models to both find them and ultimately
[5:34:35 PM ET] them
[5:34:35 PM ET] and
[5:34:36 PM ET] deploying and there
[5:34:36 PM ET] are
[5:34:37 PM ET] some
[5:34:37 PM ET] people
[5:34:37 PM ET] who
[5:34:37 PM ET] think
[5:34:38 PM ET] help with patching them and deploying and there are some people who think that
[5:34:38 PM ET] that
[5:34:39 PM ET] uh
[5:34:39 PM ET] the
[5:34:39 PM ET] amount
[5:34:40 PM ET] the
[5:34:40 PM ET] total amount
[5:34:40 PM ET] of
[5:34:41 PM ET] tokens
[5:34:41 PM ET] used over
[5:34:42 PM ET] the
[5:34:42 PM ET] next
[5:34:42 PM ET] year or
[5:34:43 PM ET] the the amount the total amount of tokens used over the next
[5:34:43 PM ET] year or two
[5:34:44 PM ET] two,
[5:34:44 PM ET] 20%
[5:34:44 PM ET] of
[5:34:45 PM ET] it if some
[5:34:46 PM ET] significant percent of
[5:34:46 PM ET] it
[5:34:46 PM ET] may end
[5:34:46 PM ET] up
[5:34:47 PM ET] being
[5:34:47 PM ET] just
[5:34:48 PM ET] security and that's
[5:34:48 PM ET] twenty percent of it if some significant percent of it may end up being just security
[5:34:48 PM ET] a
[5:34:49 PM ET] relatively
[5:34:49 PM ET] new
[5:34:49 PM ET] use
[5:34:51 PM ET] case on
[5:34:51 PM ET] top of
[5:34:51 PM ET] what we're
[5:34:52 PM ET] seeing
[5:34:52 PM ET] with
[5:34:53 PM ET] coding and how
[5:34:53 PM ET] and that's a relatively new use case on top of what we're seeing with
[5:34:53 PM ET] that
[5:34:53 PM ET] continues
[5:34:54 PM ET] to
[5:34:54 PM ET] grow, on
[5:34:54 PM ET] top of
[5:34:55 PM ET] what we're
[5:34:55 PM ET] seeing
[5:34:55 PM ET] with
[5:34:56 PM ET] the
[5:34:57 PM ET] coding and how that continues to grow on top of what we're seeing with with you know the various
[5:34:57 PM ET] various
[5:34:58 PM ET] I'll call
[5:34:58 PM ET] it ai
[5:35:00 PM ET] companions
[5:35:00 PM ET] both in
[5:35:01 PM ET] the
[5:35:01 PM ET] consumer
[5:35:02 PM ET] i'll call it ai companions both in the
[5:35:02 PM ET] space
[5:35:02 PM ET] and in
[5:35:03 PM ET] the
[5:35:03 PM ET] work
[5:35:03 PM ET] like
[5:35:04 PM ET] with
[5:35:04 PM ET] Quick.
[5:35:05 PM ET] And these are
[5:35:06 PM ET] just
[5:35:06 PM ET] consumer space and in the workspace like with quick
[5:35:06 PM ET] the
[5:35:06 PM ET] initial
[5:35:07 PM ET] big
[5:35:07 PM ET] use
[5:35:08 PM ET] cases and
[5:35:08 PM ET] you
[5:35:08 PM ET] layer on top
[5:35:09 PM ET] of
[5:35:09 PM ET] and these are just the initial big use cases
[5:35:09 PM ET] that what
[5:35:09 PM ET] you're going to
[5:35:10 PM ET] see
[5:35:10 PM ET] with
[5:35:11 PM ET] enterprises where
[5:35:11 PM ET] I
[5:35:11 PM ET] believe
[5:35:12 PM ET] virtually
[5:35:13 PM ET] and you layer on top of that what you're gonna see with enterprises where i believe virtually
[5:35:13 PM ET] every
[5:35:13 PM ET] every
[5:35:14 PM ET] enterprise
[5:35:15 PM ET] modern
[5:35:15 PM ET] enterprise
[5:35:16 PM ET] production
[5:35:16 PM ET] application will
[5:35:17 PM ET] be
[5:35:17 PM ET] rewritten to
[5:35:18 PM ET] be
[5:35:18 PM ET] enterprise modern enterprise production application will be rewritten
[5:35:19 PM ET] agentically
[5:35:19 PM ET] capable.
[5:35:20 PM ET] because that's the
[5:35:20 PM ET] way
[5:35:20 PM ET] you're going to
[5:35:20 PM ET] have
[5:35:21 PM ET] to
[5:35:22 PM ET] deploy
[5:35:22 PM ET] if
[5:35:22 PM ET] you want
[5:35:22 PM ET] to
[5:35:23 PM ET] to be agentically capable because that's the way you're gonna have to deploy
[5:35:23 PM ET] move
[5:35:23 PM ET] quickly
[5:35:23 PM ET] or you want to
[5:35:24 PM ET] actually
[5:35:24 PM ET] guard in the
[5:35:25 PM ET] right
[5:35:25 PM ET] way
[5:35:25 PM ET] against some of
[5:35:26 PM ET] the
[5:35:26 PM ET] security
[5:35:27 PM ET] if you wanna move quickly or you wanna actually guard in the right way against some of the security risks
[5:35:27 PM ET] risks there
[5:35:27 PM ET] is
[5:35:28 PM ET] just
[5:35:29 PM ET] so
[5:35:29 PM ET] much
[5:35:30 PM ET] is just so much
[5:35:30 PM ET] AI.
[5:35:31 PM ET] coming.
[5:35:32 PM ET] So, you know,
[5:35:32 PM ET] that's
[5:35:33 PM ET] you can't
[5:35:34 PM ET] ai coming so you know that's you can't predict
[5:35:34 PM ET] predict, you
[5:35:35 PM ET] can't
[5:35:35 PM ET] predict with
[5:35:36 PM ET] any
[5:35:37 PM ET] certainty
[5:35:37 PM ET] five
[5:35:37 PM ET] to
[5:35:37 PM ET] 10
[5:35:38 PM ET] years from
[5:35:39 PM ET] now
[5:35:39 PM ET] especially if
[5:35:39 PM ET] you can't predict with any certainty five
[5:35:39 PM ET] at these types
[5:35:40 PM ET] of
[5:35:40 PM ET] growth
[5:35:40 PM ET] rates, but
[5:35:41 PM ET] it's
[5:35:41 PM ET] not a
[5:35:41 PM ET] stretch for
[5:35:42 PM ET] us
[5:35:42 PM ET] to
[5:35:42 PM ET] to ten years from now especially these types of growth rates but it's not a stretch for us
[5:35:42 PM ET] imagine that
[5:35:43 PM ET] this could be a good
[5:35:44 PM ET] over a
[5:35:44 PM ET] trillion
[5:35:44 PM ET] dollar
[5:35:45 PM ET] to imagine that this could be over a trillion dollar business
[5:35:46 PM ET] business.
[5:35:46 PM ET] On
[5:35:47 PM ET] the robotic
[5:35:48 PM ET] on the robotics side
[5:35:48 PM ET] side,
[5:35:50 PM ET] What I'm doing is
[5:35:51 PM ET] I would
[5:35:51 PM ET] say that the problem that the
[5:35:51 PM ET] is
[5:35:52 PM ET] that
[5:35:52 PM ET] what i would say is that
[5:35:53 PM ET] it's pretty
[5:35:55 PM ET] remarkable
[5:35:55 PM ET] what's
[5:35:55 PM ET] happening in the
[5:35:55 PM ET] robotics.
[5:35:56 PM ET] right
[5:35:57 PM ET] now.
[5:35:57 PM ET] I'll say in
[5:35:57 PM ET] it's pretty remarkable what's happening in robotics right now
[5:35:58 PM ET] general,
[5:35:58 PM ET] but
[5:35:59 PM ET] particularly the
[5:35:59 PM ET] at
[5:36:00 PM ET] Amazon we
[5:36:00 PM ET] have
[5:36:01 PM ET] over
[5:36:01 PM ET] a
[5:36:01 PM ET] million
[5:36:01 PM ET] robots
[5:36:02 PM ET] i'll say in general but particularly at amazon
[5:36:02 PM ET] now in
[5:36:02 PM ET] our
[5:36:03 PM ET] fulfillment
[5:36:04 PM ET] network.
[5:36:04 PM ET] and while there
[5:36:05 PM ET] they're
[5:36:05 PM ET] having
[5:36:05 PM ET] we have over a million robots now in our fulfillment network
[5:36:05 PM ET] very
[5:36:06 PM ET] significant
[5:36:06 PM ET] impact on
[5:36:06 PM ET] our
[5:36:07 PM ET] cost
[5:36:08 PM ET] structure and on
[5:36:08 PM ET] our
[5:36:08 PM ET] and while they're having very significant impact on our cost structure and on our
[5:36:09 PM ET] productivity and
[5:36:10 PM ET] on
[5:36:10 PM ET] safety.
[5:36:11 PM ET] You know, if you look at
[5:36:11 PM ET] our
[5:36:12 PM ET] safety
[5:36:12 PM ET] numbers and
[5:36:12 PM ET] our
[5:36:13 PM ET] fulfillment
[5:36:13 PM ET] productivity and on safety you know if you are you look at our safety numbers and our fulfillment
[5:36:14 PM ET] network, there
[5:36:14 PM ET] they're
[5:36:14 PM ET] at
[5:36:15 PM ET] um
[5:36:15 PM ET] record
[5:36:16 PM ET] low
[5:36:16 PM ET] numbers. We've
[5:36:16 PM ET] made
[5:36:17 PM ET] huge
[5:36:18 PM ET] network they're record low numbers we've made huge progress
[5:36:18 PM ET] progress over the
[5:36:18 PM ET] last
[5:36:18 PM ET] four to
[5:36:19 PM ET] five
[5:36:19 PM ET] years on
[5:36:19 PM ET] robotics.
[5:36:20 PM ET] has been a
[5:36:20 PM ET] big
[5:36:21 PM ET] piece of
[5:36:21 PM ET] that.
[5:36:22 PM ET] and yet
[5:36:22 PM ET] i would
[5:36:22 PM ET] tell
[5:36:22 PM ET] you,
[5:36:22 PM ET] over the last four to five years and robotics has been a big piece of that
[5:36:22 PM ET] we're
[5:36:23 PM ET] still
[5:36:24 PM ET] so
[5:36:24 PM ET] early
[5:36:24 PM ET] with respect to the
[5:36:26 PM ET] to both
[5:36:26 PM ET] what
[5:36:26 PM ET] we
[5:36:26 PM ET] and yet i would tell you we're still so early with respect to
[5:36:26 PM ET] have
[5:36:27 PM ET] deployed
[5:36:28 PM ET] built and
[5:36:29 PM ET] deployed
[5:36:30 PM ET] and what
[5:36:30 PM ET] we're working
[5:36:30 PM ET] both what we have deployed built and deployed
[5:36:31 PM ET] on.
[5:36:31 PM ET] and I
[5:36:31 PM ET] think
[5:36:31 PM ET] that you'll
[5:36:32 PM ET] see we
[5:36:33 PM ET] will
[5:36:33 PM ET] always have to do
[5:36:34 PM ET] and what we're working on and i think that you'll see we will always have
[5:36:34 PM ET] have a lot
[5:36:34 PM ET] of
[5:36:35 PM ET] teammates in
[5:36:35 PM ET] our
[5:36:36 PM ET] fulfillment
[5:36:36 PM ET] centers,
[5:36:37 PM ET] but I
[5:36:37 PM ET] think a
[5:36:37 PM ET] lot of people are going to be able to do
[5:36:37 PM ET] lot
[5:36:37 PM ET] of the
[5:36:38 PM ET] jobs
[5:36:38 PM ET] that we
[5:36:39 PM ET] a lot of teammates in our fulfillment centers but i think a lot of the jobs that we have
[5:36:39 PM ET] have that
[5:36:39 PM ET] are
[5:36:40 PM ET] more
[5:36:40 PM ET] repetitive that
[5:36:40 PM ET] we have
[5:36:41 PM ET] humans
[5:36:41 PM ET] doing will
[5:36:41 PM ET] be
[5:36:42 PM ET] done
[5:36:42 PM ET] by
[5:36:43 PM ET] robots.
[5:36:44 PM ET] I think
[5:36:44 PM ET] we
[5:36:44 PM ET] will, you
[5:36:44 PM ET] are more repetitive that we have humans doing will be done by robots
[5:36:45 PM ET] we're
[5:36:45 PM ET] investing in
[5:36:45 PM ET] all sorts
[5:36:46 PM ET] of
[5:36:46 PM ET] additional
[5:36:46 PM ET] robotics.
[5:36:48 PM ET] of all
[5:36:48 PM ET] different
[5:36:48 PM ET] i think we will we're investing in all sorts of additional robotics
[5:36:49 PM ET] form
[5:36:50 PM ET] factors.
[5:36:50 PM ET] I think we
[5:36:51 PM ET] have
[5:36:51 PM ET] the
[5:36:52 PM ET] opportunity
[5:36:52 PM ET] of all different form factors i think we have the the opportunity
[5:36:52 PM ET] to
[5:36:53 PM ET] also
[5:36:53 PM ET] to also
[5:36:54 PM ET] um assist on
[5:36:54 PM ET] some of
[5:36:55 PM ET] the
[5:36:56 PM ET] delivering a little
[5:36:56 PM ET] the
[5:36:57 PM ET] on last
[5:36:57 PM ET] 100
[5:36:57 PM ET] yards to
[5:36:58 PM ET] customer
[5:36:58 PM ET] assist in some of the delivering on the last
[5:36:59 PM ET] stores. We have a
[5:36:59 PM ET] lot
[5:37:00 PM ET] coming. And
[5:37:01 PM ET] so, you
[5:37:01 PM ET] know, for
[5:37:01 PM ET] us the
[5:37:01 PM ET] hundred yards to customer stores we have a lot coming and so
[5:37:02 PM ET] way
[5:37:02 PM ET] we
[5:37:02 PM ET] measure robotics
[5:37:04 PM ET] are
[5:37:04 PM ET] you know for us the way we measure robotics are
[5:37:04 PM ET] does
[5:37:04 PM ET] it
[5:37:05 PM ET] lead
[5:37:05 PM ET] to
[5:37:06 PM ET] comparable
[5:37:06 PM ET] or
[5:37:07 PM ET] better
[5:37:08 PM ET] does it lead to comparable or better productivity
[5:37:08 PM ET] productivity,
[5:37:09 PM ET] safety, and so
[5:37:09 PM ET] cost, and so
[5:37:09 PM ET] safety
[5:37:11 PM ET] structure,
[5:37:11 PM ET] and
[5:37:11 PM ET] time
[5:37:11 PM ET] to
[5:37:12 PM ET] delivery.
[5:37:13 PM ET] And when we
[5:37:13 PM ET] like that kind
[5:37:14 PM ET] combination
[5:37:14 PM ET] of
[5:37:14 PM ET] cost structure and time to delivery
[5:37:15 PM ET] economics,
[5:37:15 PM ET] we
[5:37:15 PM ET] will
[5:37:16 PM ET] deploy
[5:37:16 PM ET] it
[5:37:16 PM ET] at
[5:37:17 PM ET] and when we like that combination of economics we will deploy it at scale
[5:37:17 PM ET] scale.
[5:37:18 PM ET] in
[5:37:18 PM ET] our
[5:37:19 PM ET] fulfillment
[5:37:19 PM ET] network.
[5:37:20 PM ET] And if I look at the
[5:37:20 PM ET] new
[5:37:21 PM ET] designs that
[5:37:21 PM ET] we
[5:37:21 PM ET] have
[5:37:21 PM ET] coming in
[5:37:22 PM ET] our film network
[5:37:22 PM ET] in in our fulfillment network and if i look at the new designs that we have coming in our
[5:37:22 PM ET] fulfillment
[5:37:23 PM ET] fulfillment network
[5:37:23 PM ET] network.
[5:37:25 PM ET] uh they including
[5:37:25 PM ET] our
[5:37:25 PM ET] you know our
[5:37:26 PM ET] expansion
[5:37:26 PM ET] of
[5:37:26 PM ET] same-day
[5:37:28 PM ET] they including our expansion of same day facilities
[5:37:28 PM ET] facilities they
[5:37:28 PM ET] are
[5:37:29 PM ET] very
[5:37:29 PM ET] heavy
[5:37:29 PM ET] on
[5:37:30 PM ET] robotics.
[5:37:30 PM ET] they are very heavy on robotics so
[5:37:30 PM ET] so
[5:37:30 PM ET] we
[5:37:31 PM ET] think
[5:37:31 PM ET] it
[5:37:31 PM ET] it's how
[5:37:31 PM ET] had
[5:37:32 PM ET] a big
[5:37:32 PM ET] impact and we
[5:37:32 PM ET] think
[5:37:33 PM ET] it's
[5:37:33 PM ET] small
[5:37:33 PM ET] compared
[5:37:34 PM ET] to
[5:37:34 PM ET] what it's going to
[5:37:34 PM ET] be in the
[5:37:35 PM ET] next five
[5:37:35 PM ET] we think it's had a big impact and we think it's small compared to what it's going to be in the next five
[5:37:36 PM ET] years.
[5:37:40 PM ET] Thank
[5:37:41 PM ET] you.
[5:37:42 PM ET] Our next
[5:37:42 PM ET] question comes from the
[5:37:43 PM ET] line
[5:37:43 PM ET] of Mark
[5:37:44 PM ET] thank you our next question
[5:37:44 PM ET] Mahaney
[5:37:44 PM ET] with
[5:37:45 PM ET] Evercourt
[5:37:46 PM ET] comes from the line of mark mahaney with evercore isi
[5:37:46 PM ET] ISI.
[5:37:47 PM ET] Please
[5:37:47 PM ET] proceed with
[5:37:47 PM ET] your
[5:37:48 PM ET] question.
[5:37:48 PM ET] please proceed with your question
[5:37:50 PM ET] Two things.
[5:37:50 PM ET] one.
[5:37:51 PM ET] uh first uh
[5:37:51 PM ET] thanks a
[5:37:51 PM ET] lot
[5:37:51 PM ET] for
[5:37:52 PM ET] the
[5:37:53 PM ET] forward
[5:37:53 PM ET] comments
[5:37:53 PM ET] two things one first thanks a lot for the
[5:37:53 PM ET] on
[5:37:54 PM ET] AWS
[5:37:54 PM ET] growth. Could
[5:37:55 PM ET] I
[5:37:55 PM ET] ask you
[5:37:55 PM ET] to
[5:37:56 PM ET] draw
[5:37:56 PM ET] out
[5:37:56 PM ET] on
[5:37:57 PM ET] forward comments on aws growth could i
[5:37:57 PM ET] margins
[5:37:58 PM ET] too?
[5:37:58 PM ET] I know
[5:37:59 PM ET] that
[5:37:59 PM ET] margins can
[5:38:00 PM ET] move up and
[5:38:00 PM ET] ask you to draw out on margins too i know that margins can move up
[5:38:00 PM ET] down quarter
[5:38:00 PM ET] to
[5:38:01 PM ET] quarter,
[5:38:01 PM ET] but over
[5:38:01 PM ET] the
[5:38:02 PM ET] next two
[5:38:02 PM ET] years, you think about the
[5:38:03 PM ET] current
[5:38:04 PM ET] and down quarter to quarter but over the next two years do you think the current margin
[5:38:04 PM ET] margin
[5:38:05 PM ET] structure
[5:38:05 PM ET] is
[5:38:06 PM ET] relatively
[5:38:07 PM ET] stable.
[5:38:07 PM ET] you know we kind of
[5:38:07 PM ET] hold that these kinds
[5:38:07 PM ET] of
[5:38:08 PM ET] high
[5:38:08 PM ET] 30s,
[5:38:09 PM ET] forty percent
[5:38:09 PM ET] structure is relatively stable we kind of hold at these kind of high 30s forty percent
[5:38:09 PM ET] operating
[5:38:10 PM ET] margins for
[5:38:11 PM ET] AWS.
[5:38:11 PM ET] And then on
[5:38:12 PM ET] perishable
[5:38:13 PM ET] checkout,
[5:38:14 PM ET] I'm
[5:38:14 PM ET] a
[5:38:14 PM ET] super
[5:38:14 PM ET] operating margins for aws and then on perishable checkout
[5:38:15 PM ET] excited
[5:38:15 PM ET] about
[5:38:15 PM ET] this
[5:38:16 PM ET] opportunity just
[5:38:16 PM ET] watching
[5:38:16 PM ET] how
[5:38:16 PM ET] it's
[5:38:17 PM ET] rolled
[5:38:17 PM ET] out in my
[5:38:18 PM ET] i'm super excited about this opportunity just watching how it's
[5:38:18 PM ET] neighborhood and in
[5:38:18 PM ET] other
[5:38:19 PM ET] areas.
[5:38:19 PM ET] rolled out in my neighborhood and in other areas
[5:38:20 PM ET] How much
[5:38:21 PM ET] coverage do you
[5:38:22 PM ET] have
[5:38:22 PM ET] for
[5:38:22 PM ET] perishable
[5:38:23 PM ET] checkout? In other words, how
[5:38:24 PM ET] many, many
[5:38:24 PM ET] PIME
[5:38:24 PM ET] how much coverage do you have for perishable checkout in other words how many
[5:38:25 PM ET] households do you
[5:38:25 PM ET] think you've
[5:38:26 PM ET] covered uh
[5:38:27 PM ET] with
[5:38:27 PM ET] perishable
[5:38:28 PM ET] checkout?
[5:38:28 PM ET] and for those that
[5:38:29 PM ET] prime households do you think you've covered with perishable checkout
[5:38:29 PM ET] you
[5:38:30 PM ET] that have that have exp
[5:38:30 PM ET] uh
[5:38:30 PM ET] used
[5:38:31 PM ET] it, how
[5:38:31 PM ET] much
[5:38:31 PM ET] of a
[5:38:32 PM ET] boost do you
[5:38:32 PM ET] think that
[5:38:32 PM ET] is
[5:38:33 PM ET] and for those that you that have used it
[5:38:33 PM ET] per
[5:38:33 PM ET] prime
[5:38:34 PM ET] household like
[5:38:35 PM ET] is this something that
[5:38:36 PM ET] how much of a boost do you think that is per prime household like is this something that increases
[5:38:36 PM ET] increases
[5:38:36 PM ET] spend per prime
[5:38:37 PM ET] household
[5:38:37 PM ET] by
[5:38:38 PM ET] 20%?
[5:38:38 PM ET] 50%, a hundred
[5:38:40 PM ET] 100% just going
[5:38:40 PM ET] given how
[5:38:40 PM ET] large the
[5:38:41 PM ET] fresh grocery issue
[5:38:41 PM ET] spend per prime household by twenty percent fifty percent one hundred percent just given how large
[5:38:41 PM ET] cat
[5:38:42 PM ET] category
[5:38:42 PM ET] is.
[5:38:42 PM ET] Thanks a
[5:38:43 PM ET] the fresh grocery category is thanks a lot
[5:38:43 PM ET] lot.
[5:38:44 PM ET] Hey, Mark, let
[5:38:45 PM ET] me
[5:38:45 PM ET] start with
[5:38:45 PM ET] the
[5:38:45 PM ET] operating
[5:38:46 PM ET] margin
[5:38:46 PM ET] outlook for
[5:38:48 PM ET] AWS.
[5:38:48 PM ET] So we're
[5:38:48 PM ET] not
[5:38:49 PM ET] hey mark let me start with the operating margin outlook for aws
[5:38:49 PM ET] so we're not guiding
[5:38:50 PM ET] guiding
[5:38:50 PM ET] the
[5:38:51 PM ET] out
[5:38:52 PM ET] beyond.
[5:38:52 PM ET] out beyond
[5:38:52 PM ET] we're not
[5:38:52 PM ET] guiding at
[5:38:53 PM ET] it all on
[5:38:53 PM ET] our
[5:38:54 PM ET] margin
[5:38:54 PM ET] for
[5:38:55 PM ET] aws um
[5:38:56 PM ET] But I can tell
[5:38:56 PM ET] you, give
[5:38:57 PM ET] you
[5:38:57 PM ET] my
[5:38:57 PM ET] not guiding at all on our margin for aws
[5:38:58 PM ET] color on
[5:38:59 PM ET] it.
[5:38:59 PM ET] so you know
[5:39:00 PM ET] very you've
[5:39:00 PM ET] seen
[5:39:00 PM ET] but i can tell you give you my color on it
[5:39:01 PM ET] very
[5:39:01 PM ET] very we've seen very strong
[5:39:01 PM ET] strong.
[5:39:02 PM ET] stop
[5:39:03 PM ET] op margin
[5:39:03 PM ET] margin.
[5:39:04 PM ET] 38.7%
[5:39:05 PM ET] this
[5:39:06 PM ET] quarter.
[5:39:06 PM ET] and I
[5:39:06 PM ET] thirty eight point seven percent this quarter
[5:39:06 PM ET] would add
[5:39:07 PM ET] that
[5:39:07 PM ET] the
[5:39:08 PM ET] profitability has
[5:39:08 PM ET] been
[5:39:08 PM ET] seeing
[5:39:09 PM ET] recently
[5:39:10 PM ET] i would add that the profitability you've been seeing recently is
[5:39:10 PM ET] is
[5:39:10 PM ET] really
[5:39:11 PM ET] not a
[5:39:11 PM ET] random
[5:39:12 PM ET] output.
[5:39:12 PM ET] It's the
[5:39:13 PM ET] result
[5:39:13 PM ET] of a lot
[5:39:14 PM ET] of
[5:39:14 PM ET] disciplined
[5:39:14 PM ET] efficiency
[5:39:15 PM ET] really not a random output it's a result of a lot of disciplined efficiency gains
[5:39:15 PM ET] gains
[5:39:16 PM ET] capacity
[5:39:17 PM ET] capacity optimization
[5:39:17 PM ET] optimization.
[5:39:18 PM ET] closely
[5:39:18 PM ET] managing
[5:39:18 PM ET] our
[5:39:18 PM ET] fixed
[5:39:19 PM ET] closely managing our fixed cost
[5:39:19 PM ET] cost.
[5:39:20 PM ET] And as
[5:39:20 PM ET] Andy
[5:39:20 PM ET] said, you
[5:39:21 PM ET] know,
[5:39:21 PM ET] the
[5:39:22 PM ET] inclusion
[5:39:22 PM ET] of
[5:39:22 PM ET] over
[5:39:23 PM ET] time more and
[5:39:24 PM ET] more
[5:39:24 PM ET] and as andy said the inclusion of over time more and more
[5:39:24 PM ET] custom
[5:39:25 PM ET] custom chips
[5:39:26 PM ET] chips into
[5:39:26 PM ET] our
[5:39:27 PM ET] cost
[5:39:27 PM ET] uh
[5:39:28 PM ET] into our cost structure
[5:39:28 PM ET] structure.
[5:39:29 PM ET] uh however you
[5:39:30 PM ET] know, there
[5:39:30 PM ET] are
[5:39:30 PM ET] other
[5:39:31 PM ET] things.
[5:39:31 PM ET] bouncing
[5:39:33 PM ET] around.
[5:39:33 PM ET] however there are other things
[5:39:33 PM ET] in fact
[5:39:33 PM ET] the, you
[5:39:34 PM ET] know
[5:39:34 PM ET] bouncing around in fact
[5:39:35 PM ET] the
[5:39:35 PM ET] outsized growth
[5:39:35 PM ET] of AI.
[5:39:37 PM ET] puts
[5:39:37 PM ET] market
[5:39:37 PM ET] pressure
[5:39:37 PM ET] on the
[5:39:38 PM ET] business as a
[5:39:38 PM ET] whole
[5:39:39 PM ET] because
[5:39:39 PM ET] market
[5:39:39 PM ET] margins are
[5:39:39 PM ET] outsized growth of ai puts margin pressure on the business as a whole because
[5:39:40 PM ET] lower
[5:39:40 PM ET] the margins are lower there
[5:39:41 PM ET] there.
[5:39:41 PM ET] We are, we
[5:39:42 PM ET] are happy with the
[5:39:44 PM ET] progression
[5:39:44 PM ET] in
[5:39:44 PM ET] both
[5:39:45 PM ET] core
[5:39:45 PM ET] and
[5:39:45 PM ET] we are happy with the progression
[5:39:45 PM ET] AI
[5:39:47 PM ET] in both core and ai margins
[5:39:47 PM ET] margins.
[5:39:47 PM ET] and there as andy
[5:39:47 PM ET] said
[5:39:48 PM ET] earlier,
[5:39:48 PM ET] they're
[5:39:48 PM ET] head
[5:39:48 PM ET] of
[5:39:49 PM ET] where the
[5:39:49 PM ET] core
[5:39:49 PM ET] was it
[5:39:50 PM ET] a
[5:39:50 PM ET] similar
[5:39:50 PM ET] point in
[5:39:51 PM ET] time.
[5:39:51 PM ET] but
[5:39:51 PM ET] they're
[5:39:52 PM ET] as andy said earlier they're ahead of where the core was at a similar point in time but
[5:39:52 PM ET] still
[5:39:52 PM ET] lower.
[5:39:53 PM ET] so there's gonna be that
[5:39:53 PM ET] mix
[5:39:53 PM ET] issue there's
[5:39:54 PM ET] also a
[5:39:54 PM ET] headwinds
[5:39:55 PM ET] from
[5:39:56 PM ET] but they're still lower there's going be that mix issue there's also headwinds from
[5:39:56 PM ET] component
[5:39:56 PM ET] pricing that
[5:39:57 PM ET] we've
[5:39:57 PM ET] talked
[5:39:58 PM ET] about.
[5:39:58 PM ET] So
[5:39:59 PM ET] component pricing that we've talked about
[5:39:59 PM ET] can
[5:40:00 PM ET] predict
[5:40:00 PM ET] it,
[5:40:01 PM ET] but
[5:40:01 PM ET] uh there's going
[5:40:01 PM ET] to
[5:40:01 PM ET] gonna be
[5:40:02 PM ET] always
[5:40:02 PM ET] a
[5:40:02 PM ET] confluence of
[5:40:03 PM ET] these
[5:40:03 PM ET] multiple
[5:40:04 PM ET] cannot predict it but there's going to be always a confluence of
[5:40:04 PM ET] factors
[5:40:04 PM ET] that
[5:40:04 PM ET] we work
[5:40:05 PM ET] working
[5:40:05 PM ET] very
[5:40:05 PM ET] hard
[5:40:05 PM ET] on
[5:40:06 PM ET] the
[5:40:06 PM ET] cost
[5:40:07 PM ET] multiple factors that we're working very hard on the cost side
[5:40:07 PM ET] side.
[5:40:07 PM ET] and the
[5:40:07 PM ET] efficiency
[5:40:08 PM ET] and the efficiency side
[5:40:09 PM ET] side and dealing
[5:40:10 PM ET] with
[5:40:11 PM ET] investments
[5:40:11 PM ET] and
[5:40:11 PM ET] new products.
[5:40:13 PM ET] product.
[5:40:13 PM ET] and dealing with investments and new product
[5:40:13 PM ET] margins as
[5:40:13 PM ET] they
[5:40:14 PM ET] start
[5:40:14 PM ET] and
[5:40:15 PM ET] launch and
[5:40:15 PM ET] reach
[5:40:16 PM ET] uh
[5:40:16 PM ET] margins as they start up and launch and reach scale
[5:40:17 PM ET] scale.
[5:40:18 PM ET] On
[5:40:18 PM ET] on the
[5:40:18 PM ET] the
[5:40:19 PM ET] perishable
[5:40:20 PM ET] checkout
[5:40:20 PM ET] Mark
[5:40:21 PM ET] I should have to do
[5:40:21 PM ET] share
[5:40:22 PM ET] your
[5:40:23 PM ET] enthusiasm.
[5:40:23 PM ET] about
[5:40:23 PM ET] perishables checkout mark i share your enthusiasm
[5:40:24 PM ET] it. It's
[5:40:25 PM ET] you know, it's
[5:40:25 PM ET] as we've
[5:40:25 PM ET] had
[5:40:26 PM ET] a, you
[5:40:26 PM ET] know, we've
[5:40:26 PM ET] had a
[5:40:27 PM ET] big
[5:40:27 PM ET] grocery
[5:40:27 PM ET] about it it's as you know we've had a
[5:40:27 PM ET] business for a
[5:40:29 PM ET] while
[5:40:29 PM ET] and
[5:40:29 PM ET] it's
[5:40:29 PM ET] mostly
[5:40:30 PM ET] been
[5:40:30 PM ET] in the
[5:40:31 PM ET] we've had a big grocery business for a while and it's mostly been
[5:40:31 PM ET] middle
[5:40:31 PM ET] aisles of what
[5:40:32 PM ET] you'd
[5:40:32 PM ET] find in a
[5:40:33 PM ET] grocery
[5:40:33 PM ET] store
[5:40:34 PM ET] consumables can
[5:40:34 PM ET] canned
[5:40:35 PM ET] goods,
[5:40:35 PM ET] pharmaceuticals, and other
[5:40:35 PM ET] in the middle aisles of what you'd find in a grocery store consumables canned goods
[5:40:36 PM ET] items, beauty
[5:40:36 PM ET] products.
[5:40:38 PM ET] And we've had
[5:40:38 PM ET] this, you
[5:40:38 PM ET] know,
[5:40:38 PM ET] leading
[5:40:39 PM ET] organic
[5:40:39 PM ET] grocery
[5:40:39 PM ET] store in
[5:40:40 PM ET] pharmaceutical items beauty products and we've had this you know leading organic grocery
[5:40:40 PM ET] and whole foods
[5:40:40 PM ET] market,
[5:40:40 PM ET] which
[5:40:41 PM ET] also
[5:40:41 PM ET] is you know
[5:40:42 PM ET] growing
[5:40:42 PM ET] faster than the
[5:40:43 PM ET] rest of
[5:40:43 PM ET] grocery
[5:40:44 PM ET] segment, both in
[5:40:44 PM ET] store and whole foods market which also is growing faster than the rest of the grocery segment
[5:40:44 PM ET] the
[5:40:45 PM ET] top
[5:40:45 PM ET] line and the
[5:40:45 PM ET] bottom
[5:40:46 PM ET] line with
[5:40:47 PM ET] a
[5:40:47 PM ET] new
[5:40:48 PM ET] format
[5:40:48 PM ET] and
[5:40:48 PM ET] daily
[5:40:49 PM ET] shop and
[5:40:49 PM ET] in
[5:40:49 PM ET] in the top line and the bottom line with a new format and daily shop
[5:40:50 PM ET] urban
[5:40:51 PM ET] environments it's
[5:40:51 PM ET] doing
[5:40:51 PM ET] really
[5:40:52 PM ET] well that we're
[5:40:52 PM ET] in the
[5:40:52 PM ET] process of
[5:40:53 PM ET] rolling
[5:40:53 PM ET] out
[5:40:53 PM ET] over the
[5:40:53 PM ET] next
[5:40:53 PM ET] couple
[5:40:54 PM ET] of
[5:40:54 PM ET] in urban environments it's doing really well that we're in the process of rolling out over the next
[5:40:54 PM ET] years.
[5:40:55 PM ET] But we've always
[5:40:55 PM ET] known if
[5:40:55 PM ET] we
[5:40:56 PM ET] wanted to be able
[5:40:56 PM ET] serve
[5:40:57 PM ET] customers the way
[5:40:58 PM ET] we
[5:40:58 PM ET] think
[5:40:58 PM ET] they
[5:40:58 PM ET] couple of years we've always known if we wanted to be able to serve customers
[5:40:58 PM ET] want to be
[5:40:59 PM ET] served and the
[5:40:59 PM ET] way we
[5:41:00 PM ET] want
[5:41:00 PM ET] to we have to
[5:41:01 PM ET] a
[5:41:02 PM ET] customers the way we think they want to be served and the way we want to we have to have a mass
[5:41:02 PM ET] mass
[5:41:03 PM ET] offering.
[5:41:03 PM ET] and
[5:41:03 PM ET] it starts
[5:41:04 PM ET] with
[5:41:04 PM ET] offering it starts with perishables
[5:41:04 PM ET] perishables
[5:41:05 PM ET] and
[5:41:05 PM ET] and you
[5:41:06 PM ET] know
[5:41:06 PM ET] if
[5:41:07 PM ET] if you
[5:41:07 PM ET] you
[5:41:08 PM ET] if
[5:41:08 PM ET] you
[5:41:08 PM ET] look
[5:41:08 PM ET] at
[5:41:09 PM ET] the
[5:41:09 PM ET] total
[5:41:10 PM ET] spend
[5:41:11 PM ET] per
[5:41:11 PM ET] household, we
[5:41:11 PM ET] you know,
[5:41:12 PM ET] when
[5:41:12 PM ET] we look
[5:41:12 PM ET] you look at the total spend per household
[5:41:12 PM ET] at
[5:41:13 PM ET] the the
[5:41:13 PM ET] difference
[5:41:14 PM ET] between the
[5:41:14 PM ET] total amount
[5:41:15 PM ET] of
[5:41:15 PM ET] spend that
[5:41:16 PM ET] we
[5:41:16 PM ET] we look at the difference between the total amount of spend that we
[5:41:17 PM ET] think
[5:41:17 PM ET] think
[5:41:17 PM ET] are
[5:41:18 PM ET] consumers and
[5:41:19 PM ET] customers
[5:41:19 PM ET] are
[5:41:20 PM ET] spending
[5:41:20 PM ET] on
[5:41:20 PM ET] items
[5:41:21 PM ET] that
[5:41:21 PM ET] we
[5:41:21 PM ET] could
[5:41:22 PM ET] serve
[5:41:22 PM ET] our consumers and customers are spending on items that we could
[5:41:22 PM ET] them
[5:41:22 PM ET] on
[5:41:23 PM ET] versus what
[5:41:23 PM ET] they spend on
[5:41:23 PM ET] spent
[5:41:24 PM ET] us.
[5:41:25 PM ET] the biggest
[5:41:25 PM ET] difference is that they're not going to be able
[5:41:26 PM ET] is
[5:41:26 PM ET] serve them on versus what they spend on us the biggest difference is grocery
[5:41:27 PM ET] grocery.
[5:41:27 PM ET] and and you
[5:41:28 PM ET] know and in a
[5:41:29 PM ET] lot of
[5:41:29 PM ET] your
[5:41:29 PM ET] shops are a lot of
[5:41:30 PM ET] a
[5:41:30 PM ET] lot
[5:41:30 PM ET] of
[5:41:31 PM ET] grocery
[5:41:31 PM ET] and and you know like and in a lot of your shops a lot of grocery
[5:41:32 PM ET] starts
[5:41:32 PM ET] with
[5:41:33 PM ET] perishables
[5:41:33 PM ET] and
[5:41:34 PM ET] so we we
[5:41:34 PM ET] starts with perishables and so we we are
[5:41:35 PM ET] are we really
[5:41:35 PM ET] are
[5:41:35 PM ET] excited that we're going to be able to do
[5:41:36 PM ET] we feel
[5:41:36 PM ET] like
[5:41:36 PM ET] we
[5:41:37 PM ET] found
[5:41:37 PM ET] something
[5:41:38 PM ET] with
[5:41:38 PM ET] shipping
[5:41:39 PM ET] perishables out
[5:41:39 PM ET] of
[5:41:39 PM ET] our
[5:41:39 PM ET] we really are excited that we feel like we found something with
[5:41:40 PM ET] same-day
[5:41:40 PM ET] day
[5:41:41 PM ET] facilities.
[5:41:42 PM ET] You know, we've grown
[5:41:42 PM ET] shipping perishables out of our same day facilities
[5:41:43 PM ET] we've grown our
[5:41:43 PM ET] our
[5:41:44 PM ET] everyday
[5:41:44 PM ET] essentials about
[5:41:44 PM ET] three
[5:41:45 PM ET] times
[5:41:45 PM ET] faster than the rest of the
[5:41:46 PM ET] our
[5:41:48 PM ET] store.
[5:41:48 PM ET] everyday essentials about three times faster than the rest of our store
[5:41:48 PM ET] It
[5:41:48 PM ET] represents
[5:41:49 PM ET] about
[5:41:49 PM ET] half of
[5:41:49 PM ET] our
[5:41:49 PM ET] units
[5:41:50 PM ET] now. If I look at all
[5:41:50 PM ET] the
[5:41:51 PM ET] everyday
[5:41:52 PM ET] it represents about half of our units now if i look at all the everyday essentials
[5:41:52 PM ET] essentials.
[5:41:52 PM ET] what we find
[5:41:52 PM ET] is
[5:41:53 PM ET] customers
[5:41:53 PM ET] who
[5:41:54 PM ET] shop
[5:41:55 PM ET] what we find is customers who shop perishables
[5:41:55 PM ET] perishables
[5:41:55 PM ET] through
[5:41:56 PM ET] our same day.
[5:41:57 PM ET] delivery, they
[5:41:57 PM ET] buy
[5:41:57 PM ET] about
[5:41:57 PM ET] seven
[5:41:58 PM ET] times
[5:41:58 PM ET] more every day.
[5:41:59 PM ET] essential
[5:42:00 PM ET] through our same day delivery they buy about seven times more everyday
[5:42:00 PM ET] units than
[5:42:00 PM ET] those that
[5:42:01 PM ET] don't.
[5:42:01 PM ET] So again, if you're trying
[5:42:01 PM ET] to
[5:42:02 PM ET] close
[5:42:02 PM ET] that
[5:42:03 PM ET] gap
[5:42:04 PM ET] between what
[5:42:04 PM ET] essential units than those that don't again if you're trying to close that gap
[5:42:04 PM ET] consumers
[5:42:05 PM ET] spend
[5:42:05 PM ET] overall and
[5:42:05 PM ET] the
[5:42:05 PM ET] items
[5:42:06 PM ET] that
[5:42:06 PM ET] we can
[5:42:07 PM ET] provide
[5:42:07 PM ET] versus
[5:42:07 PM ET] what they spend
[5:42:08 PM ET] with
[5:42:08 PM ET] between what consumers spend overall and the items that we can provide versus what they
[5:42:09 PM ET] spend with us
[5:42:09 PM ET] us
[5:42:09 PM ET] perishables has
[5:42:09 PM ET] a
[5:42:10 PM ET] huge
[5:42:10 PM ET] impact
[5:42:10 PM ET] on
[5:42:11 PM ET] that.
[5:42:11 PM ET] we also
[5:42:12 PM ET] see
[5:42:13 PM ET] perishables has a huge impact on that we also see that
[5:42:13 PM ET] that our
[5:42:13 PM ET] grocery
[5:42:14 PM ET] customers
[5:42:14 PM ET] our grocery customers shop
[5:42:14 PM ET] shop about
[5:42:15 PM ET] four
[5:42:15 PM ET] times
[5:42:16 PM ET] more.
[5:42:17 PM ET] non-grocery
[5:42:18 PM ET] categories.
[5:42:19 PM ET] like home
[5:42:19 PM ET] at four times more non grocery categories
[5:42:20 PM ET] and
[5:42:20 PM ET] apparel a
[5:42:20 PM ET] bunch of
[5:42:20 PM ET] other
[5:42:22 PM ET] categories and spend
[5:42:22 PM ET] about
[5:42:22 PM ET] two
[5:42:22 PM ET] times
[5:42:23 PM ET] more
[5:42:23 PM ET] on
[5:42:23 PM ET] like home and apparel and a bunch of other categories
[5:42:23 PM ET] those
[5:42:24 PM ET] categories compared to the
[5:42:24 PM ET] those
[5:42:24 PM ET] who
[5:42:25 PM ET] don't
[5:42:26 PM ET] use
[5:42:26 PM ET] for
[5:42:26 PM ET] more on those categories compared to those who don't use us for
[5:42:26 PM ET] gross
[5:42:28 PM ET] grocery so
[5:42:28 PM ET] So those
[5:42:28 PM ET] are big
[5:42:29 PM ET] differences, and we
[5:42:29 PM ET] believe that have to do
[5:42:30 PM ET] the
[5:42:30 PM ET] progress we're
[5:42:31 PM ET] making
[5:42:31 PM ET] on
[5:42:32 PM ET] perishables
[5:42:32 PM ET] and
[5:42:32 PM ET] those are big differences and we believe that the progress we're making on perishables
[5:42:32 PM ET] grocery is going to
[5:42:33 PM ET] ultimately lead to the best of the
[5:42:34 PM ET] more you
[5:42:35 PM ET] know being
[5:42:35 PM ET] more
[5:42:36 PM ET] relevant to
[5:42:36 PM ET] customers for
[5:42:36 PM ET] more
[5:42:37 PM ET] of their
[5:42:37 PM ET] and grocery is gonna ultimately lead to more you know being more relevant
[5:42:37 PM ET] shopping
[5:42:37 PM ET] to customers for more of their shopping missions
[5:42:39 PM ET] missions.
[5:42:43 PM ET] Thank
[5:42:43 PM ET] you.
[5:42:44 PM ET] Our next
[5:42:45 PM ET] question comes from
[5:42:45 PM ET] the
[5:42:45 PM ET] line
[5:42:46 PM ET] thank you our next question comes from the line of
[5:42:46 PM ET] of
[5:42:46 PM ET] Eric
[5:42:48 PM ET] eric sheridan
[5:42:48 PM ET] Sheridan
[5:42:48 PM ET] with Cold
[5:42:48 PM ET] Goldman
[5:42:49 PM ET] with goldman sachs
[5:42:49 PM ET] Sachs.
[5:42:50 PM ET] Please
[5:42:50 PM ET] proceed with
[5:42:50 PM ET] your
[5:42:51 PM ET] please proceed with your question
[5:42:52 PM ET] question.
[5:42:52 PM ET] Thanks so
[5:42:53 PM ET] much,
[5:42:53 PM ET] for
[5:42:53 PM ET] taking
[5:42:53 PM ET] the
[5:42:54 PM ET] question.
[5:42:54 PM ET] Maybe a
[5:42:55 PM ET] two-parter
[5:42:55 PM ET] on
[5:42:56 PM ET] market
[5:42:56 PM ET] thanks so much for taking the question maybe
[5:42:57 PM ET] opportunities
[5:42:58 PM ET] within
[5:42:59 PM ET] AWS.
[5:42:59 PM ET] a two parter on market opportunities within
[5:42:59 PM ET] First, you know, with
[5:43:00 PM ET] respect
[5:43:00 PM ET] to
[5:43:00 PM ET] bedrock,
[5:43:01 PM ET] what
[5:43:01 PM ET] have been
[5:43:01 PM ET] your
[5:43:02 PM ET] key
[5:43:02 PM ET] aws first with respect to bedrock
[5:43:02 PM ET] learnings
[5:43:03 PM ET] about the
[5:43:03 PM ET] market
[5:43:04 PM ET] opportunity
[5:43:04 PM ET] around Bedrock?
[5:43:05 PM ET] and
[5:43:05 PM ET] how
[5:43:06 PM ET] what have been your key learnings about the market opportunity around bedrock
[5:43:06 PM ET] it
[5:43:06 PM ET] might
[5:43:06 PM ET] continue
[5:43:06 PM ET] to
[5:43:07 PM ET] scale in
[5:43:08 PM ET] the
[5:43:08 PM ET] years
[5:43:09 PM ET] ahead.
[5:43:09 PM ET] And then
[5:43:10 PM ET] with respect to the fact
[5:43:10 PM ET] and how it might continue to scale in the years ahead
[5:43:11 PM ET] decision to sell
[5:43:12 PM ET] teranium
[5:43:13 PM ET] externally,
[5:43:13 PM ET] how do you think it's a good
[5:43:13 PM ET] and then with respect to the decision to sell trainium externally
[5:43:14 PM ET] about
[5:43:14 PM ET] balancing
[5:43:14 PM ET] the
[5:43:15 PM ET] market
[5:43:16 PM ET] opportunity
[5:43:16 PM ET] of
[5:43:16 PM ET] external
[5:43:17 PM ET] sales
[5:43:18 PM ET] relative to
[5:43:18 PM ET] the
[5:43:18 PM ET] how do you think about balancing the market opportunity of external sales
[5:43:18 PM ET] need
[5:43:19 PM ET] for
[5:43:20 PM ET] compute.
[5:43:20 PM ET] for
[5:43:20 PM ET] that
[5:43:21 PM ET] opportunity relative
[5:43:21 PM ET] to other
[5:43:22 PM ET] relative to the need for compute for that opportunity relative to
[5:43:22 PM ET] opportunities
[5:43:23 PM ET] broadly
[5:43:23 PM ET] across
[5:43:24 PM ET] both
[5:43:24 PM ET] internal
[5:43:24 PM ET] use
[5:43:25 PM ET] cases
[5:43:25 PM ET] and
[5:43:26 PM ET] AWS. Thanks so
[5:43:26 PM ET] other opportunities broadly across both internal use cases
[5:43:27 PM ET] and aws thanks so much
[5:43:27 PM ET] much.
[5:43:30 PM ET] Yeah. On the bedrock.
[5:43:31 PM ET] side,
[5:43:31 PM ET] yeah on the bedrock side
[5:43:32 PM ET] you
[5:43:32 PM ET] know,
[5:43:32 PM ET] I would tell
[5:43:33 PM ET] you
[5:43:34 PM ET] you've
[5:43:34 PM ET] probably
[5:43:34 PM ET] heard
[5:43:35 PM ET] this
[5:43:35 PM ET] from
[5:43:35 PM ET] us
[5:43:36 PM ET] multiple
[5:43:36 PM ET] you know i would tell you you've probably heard this from us
[5:43:37 PM ET] times over the
[5:43:37 PM ET] last few
[5:43:37 PM ET] couple of
[5:43:38 PM ET] years
[5:43:38 PM ET] but one of
[5:43:39 PM ET] the
[5:43:39 PM ET] lessons
[5:43:39 PM ET] that
[5:43:40 PM ET] we
[5:43:40 PM ET] multiple times over the last couple of years but one of the lessons that we
[5:43:41 PM ET] we've
[5:43:42 PM ET] learned
[5:43:42 PM ET] we've learned
[5:43:43 PM ET] um
[5:43:43 PM ET] you
[5:43:43 PM ET] know, I'll
[5:43:44 PM ET] say
[5:43:44 PM ET] for
[5:43:45 PM ET] 20 plus.
[5:43:45 PM ET] years, you
[5:43:46 PM ET] in
[5:43:46 PM ET] i'll say for twenty plus years in offering
[5:43:47 PM ET] offering
[5:43:47 PM ET] technology
[5:43:47 PM ET] to
[5:43:49 PM ET] customers.
[5:43:49 PM ET] is that
[5:43:50 PM ET] there
[5:43:50 PM ET] is
[5:43:51 PM ET] technology to customers is that there is not
[5:43:51 PM ET] not
[5:43:51 PM ET] one
[5:43:52 PM ET] tool
[5:43:52 PM ET] to rule the
[5:43:52 PM ET] one tool to rule the world
[5:43:53 PM ET] world.
[5:43:54 PM ET] People
[5:43:54 PM ET] always
[5:43:55 PM ET] assume
[5:43:55 PM ET] that
[5:43:55 PM ET] whatever
[5:43:55 PM ET] is in
[5:43:56 PM ET] the
[5:43:56 PM ET] lead
[5:43:56 PM ET] early
[5:43:57 PM ET] on is going to be a good
[5:43:57 PM ET] the
[5:43:58 PM ET] only
[5:43:58 PM ET] people always assume that whatever is in the lead early on is
[5:43:58 PM ET] thing
[5:43:58 PM ET] or
[5:43:59 PM ET] things that
[5:43:59 PM ET] people
[5:44:00 PM ET] use and
[5:44:00 PM ET] it's
[5:44:00 PM ET] never
[5:44:01 PM ET] the
[5:44:01 PM ET] case. It's not
[5:44:02 PM ET] true
[5:44:02 PM ET] gonna be the the only thing or things that people use and it's never the case
[5:44:02 PM ET] in
[5:44:03 PM ET] database it hasn't
[5:44:03 PM ET] been
[5:44:03 PM ET] true in
[5:44:04 PM ET] analytics.
[5:44:05 PM ET] In the beginning of
[5:44:05 PM ET] AI,
[5:44:05 PM ET] everyone
[5:44:06 PM ET] said the
[5:44:06 PM ET] it's not true in database it hasn't been true in analytics in the beginning of ai everyone
[5:44:07 PM ET] only
[5:44:07 PM ET] framework
[5:44:08 PM ET] people
[5:44:08 PM ET] use
[5:44:08 PM ET] is
[5:44:09 PM ET] TensorFlow. It turns
[5:44:10 PM ET] out you
[5:44:10 PM ET] know,
[5:44:10 PM ET] said the only framework people use is tensorflow it turns out you know
[5:44:11 PM ET] PyTorch is
[5:44:11 PM ET] much
[5:44:11 PM ET] bigger
[5:44:11 PM ET] now, and
[5:44:12 PM ET] so
[5:44:13 PM ET] it's, and
[5:44:13 PM ET] not going to
[5:44:13 PM ET] be
[5:44:14 PM ET] true
[5:44:15 PM ET] pytorch is much bigger now so it and it's not gonna be true
[5:44:15 PM ET] with
[5:44:15 PM ET] models
[5:44:16 PM ET] either.
[5:44:17 PM ET] you know in you
[5:44:18 PM ET] I'll say in
[5:44:18 PM ET] the
[5:44:18 PM ET] next two
[5:44:18 PM ET] with models either you know in you know i'll i'll say in the next
[5:44:19 PM ET] to
[5:44:19 PM ET] three
[5:44:19 PM ET] years, I
[5:44:20 PM ET] think they're going
[5:44:20 PM ET] gonna
[5:44:20 PM ET] to
[5:44:20 PM ET] be
[5:44:21 PM ET] six
[5:44:21 PM ET] to
[5:44:21 PM ET] eight
[5:44:21 PM ET] models that
[5:44:22 PM ET] are
[5:44:22 PM ET] about
[5:44:22 PM ET] as good
[5:44:22 PM ET] each
[5:44:23 PM ET] two to three years i think they're gonna be six to eight models that are about as good as each other
[5:44:23 PM ET] other.
[5:44:24 PM ET] or at least
[5:44:24 PM ET] good
[5:44:24 PM ET] enough
[5:44:24 PM ET] for
[5:44:25 PM ET] 95 plus
[5:44:26 PM ET] percent of
[5:44:26 PM ET] the what the
[5:44:27 PM ET] workloads.
[5:44:27 PM ET] and some
[5:44:28 PM ET] will
[5:44:28 PM ET] be better at
[5:44:28 PM ET] or at least good enough for ninety five plus percent of the with the workloads and
[5:44:29 PM ET] reasoning
[5:44:29 PM ET] and some will be better at
[5:44:30 PM ET] at
[5:44:30 PM ET] coding and some will be better at
[5:44:31 PM ET] at
[5:44:32 PM ET] some will be better at reasoning and some will be better at coding and
[5:44:33 PM ET] visual
[5:44:33 PM ET] um
[5:44:34 PM ET] pieces and
[5:44:34 PM ET] some will
[5:44:34 PM ET] be
[5:44:34 PM ET] lower
[5:44:35 PM ET] latency
[5:44:35 PM ET] and
[5:44:35 PM ET] will be better visual pieces and
[5:44:35 PM ET] some will
[5:44:36 PM ET] be
[5:44:36 PM ET] lower
[5:44:37 PM ET] cost.
[5:44:38 PM ET] and
[5:44:38 PM ET] some will be lower latency and some will be lower cost and most
[5:44:38 PM ET] most
[5:44:39 PM ET] customers are going
[5:44:40 PM ET] to
[5:44:40 PM ET] use
[5:44:40 PM ET] multiple
[5:44:41 PM ET] models and
[5:44:41 PM ET] many will
[5:44:41 PM ET] use multiple
[5:44:42 PM ET] models
[5:44:42 PM ET] in the
[5:44:43 PM ET] same
[5:44:43 PM ET] customers are gonna use multiple models and many will use multiple models in the
[5:44:43 PM ET] generative
[5:44:44 PM ET] AI
[5:44:45 PM ET] application.
[5:44:46 PM ET] And so what
[5:44:46 PM ET] customers
[5:44:47 PM ET] really want to do is that we're going to have
[5:44:47 PM ET] do
[5:44:47 PM ET] want
[5:44:48 PM ET] same generative ai application and so what
[5:44:48 PM ET] do, and
[5:44:48 PM ET] we
[5:44:49 PM ET] see
[5:44:49 PM ET] this
[5:44:49 PM ET] validated
[5:44:50 PM ET] over and
[5:44:51 PM ET] over again when
[5:44:51 PM ET] customers really wanna do and we see this validated
[5:44:51 PM ET] we
[5:44:51 PM ET] talk to
[5:44:52 PM ET] customers
[5:44:52 PM ET] over and over again when we talk to customers is
[5:44:53 PM ET] is they want
[5:44:53 PM ET] a
[5:44:54 PM ET] they want a service
[5:44:54 PM ET] service that
[5:44:55 PM ET] has
[5:44:55 PM ET] really
[5:44:56 PM ET] broad
[5:44:56 PM ET] selection of
[5:44:57 PM ET] those
[5:44:57 PM ET] frontier
[5:44:58 PM ET] models and that
[5:44:58 PM ET] has
[5:44:59 PM ET] very
[5:44:59 PM ET] good
[5:44:59 PM ET] price
[5:44:59 PM ET] that has really broad selection of those frontier models
[5:45:00 PM ET] performance
[5:45:00 PM ET] and it
[5:45:00 PM ET] has
[5:45:01 PM ET] very
[5:45:02 PM ET] strong
[5:45:03 PM ET] and it has very good price performance and it has very strong
[5:45:03 PM ET] security and
[5:45:03 PM ET] access
[5:45:04 PM ET] control and they
[5:45:05 PM ET] want
[5:45:05 PM ET] that
[5:45:06 PM ET] service so that
[5:45:06 PM ET] they
[5:45:06 PM ET] can
[5:45:06 PM ET] kind
[5:45:07 PM ET] of
[5:45:07 PM ET] security access control and they want that service so that they can kind of
[5:45:07 PM ET] decide
[5:45:08 PM ET] what kind of
[5:45:08 PM ET] combination of
[5:45:09 PM ET] models they
[5:45:09 PM ET] want to
[5:45:10 PM ET] use.
[5:45:10 PM ET] and the
[5:45:10 PM ET] to swap them
[5:45:10 PM ET] back
[5:45:11 PM ET] and
[5:45:11 PM ET] forth as
[5:45:11 PM ET] they
[5:45:12 PM ET] decide what combination of models they wanna use and then swap them back and forth as they leap
[5:45:12 PM ET] leapfrog each
[5:45:13 PM ET] other as
[5:45:13 PM ET] different
[5:45:14 PM ET] constraints.
[5:45:14 PM ET] of
[5:45:15 PM ET] their
[5:45:15 PM ET] applications
[5:45:16 PM ET] require
[5:45:17 PM ET] them.
[5:45:17 PM ET] frog each other as different constraints but their applications require them
[5:45:17 PM ET] And that's what
[5:45:18 PM ET] we see
[5:45:18 PM ET] with
[5:45:18 PM ET] Bedrock.
[5:45:19 PM ET] people
[5:45:19 PM ET] are
[5:45:19 PM ET] very
[5:45:20 PM ET] excited
[5:45:20 PM ET] about
[5:45:21 PM ET] it um
[5:45:21 PM ET] and that's what we see with bedrock people are very excited about it
[5:45:22 PM ET] we
[5:45:22 PM ET] we have
[5:45:22 PM ET] have.
[5:45:23 PM ET] you know we
[5:45:24 PM ET] have both
[5:45:24 PM ET] closed
[5:45:25 PM ET] models
[5:45:26 PM ET] and
[5:45:26 PM ET] models
[5:45:27 PM ET] like...
[5:45:27 PM ET] we have both closed models and models like
[5:45:28 PM ET] anthropic
[5:45:28 PM ET] and OpenAI.
[5:45:29 PM ET] ais models we
[5:45:29 PM ET] have
[5:45:30 PM ET] open
[5:45:30 PM ET] models
[5:45:30 PM ET] with
[5:45:30 PM ET] Kimmy
[5:45:31 PM ET] and
[5:45:31 PM ET] GLM and
[5:45:32 PM ET] anthropic and openai's models we have open models with kimi and glm and others
[5:45:32 PM ET] others.
[5:45:33 PM ET] I think
[5:45:33 PM ET] the
[5:45:34 PM ET] Western
[5:45:34 PM ET] world
[5:45:34 PM ET] is
[5:45:35 PM ET] very
[5:45:36 PM ET] hungry
[5:45:36 PM ET] for
[5:45:36 PM ET] i think the western world is very hungry for
[5:45:38 PM ET] additional
[5:45:38 PM ET] open
[5:45:39 PM ET] models that
[5:45:39 PM ET] are
[5:45:40 PM ET] Western open
[5:45:41 PM ET] models and so
[5:45:41 PM ET] additional open models that are
[5:45:42 PM ET] I
[5:45:42 PM ET] believe
[5:45:42 PM ET] that will
[5:45:42 PM ET] happen over
[5:45:43 PM ET] time as
[5:45:44 PM ET] well but I
[5:45:44 PM ET] think
[5:45:45 PM ET] that
[5:45:45 PM ET] western open model and so i believe that will happen over time as well but i think that
[5:45:45 PM ET] the
[5:45:46 PM ET] size
[5:45:46 PM ET] of
[5:45:46 PM ET] the
[5:45:47 PM ET] the size of the opportunity
[5:45:48 PM ET] opportunity
[5:45:48 PM ET] in
[5:45:48 PM ET] bedrock.
[5:45:49 PM ET] is
[5:45:49 PM ET] in bedrock is
[5:45:50 PM ET] gigantic.
[5:45:50 PM ET] and it
[5:45:51 PM ET] could
[5:45:51 PM ET] be a
[5:45:51 PM ET] service as
[5:45:52 PM ET] large
[5:45:53 PM ET] ec2 which
[5:45:53 PM ET] is
[5:45:53 PM ET] a
[5:45:53 PM ET] very large
[5:45:54 PM ET] service
[5:45:54 PM ET] gigantic and it could be a service as large as ecc
[5:45:55 PM ET] today in
[5:45:55 PM ET] AWS.
[5:45:56 PM ET] So I think it's a very good
[5:45:57 PM ET] large.
[5:45:57 PM ET] which is a very large service today in aws so i think it's very large
[5:45:59 PM ET] on
[5:46:00 PM ET] On the balance
[5:46:00 PM ET] of
[5:46:01 PM ET] chips
[5:46:01 PM ET] on the balance of chips
[5:46:01 PM ET] in
[5:46:02 PM ET] what
[5:46:02 PM ET] you
[5:46:02 PM ET] sell
[5:46:03 PM ET] externally
[5:46:03 PM ET] versus
[5:46:04 PM ET] what
[5:46:04 PM ET] you
[5:46:04 PM ET] use inside
[5:46:05 PM ET] your
[5:46:06 PM ET] cloud.
[5:46:06 PM ET] it's a very good
[5:46:06 PM ET] what you sell externally versus what you use inside your cloud
[5:46:07 PM ET] question.
[5:46:07 PM ET] and it's a
[5:46:08 PM ET] question
[5:46:09 PM ET] that
[5:46:09 PM ET] we're
[5:46:09 PM ET] continuing
[5:46:10 PM ET] to
[5:46:10 PM ET] a very good question and it's a question that
[5:46:10 PM ET] evaluate
[5:46:11 PM ET] as
[5:46:11 PM ET] we
[5:46:12 PM ET] speak.
[5:46:12 PM ET] I would say
[5:46:12 PM ET] that
[5:46:13 PM ET] the
[5:46:13 PM ET] number of people that are going to be able to do
[5:46:13 PM ET] we're continuing to evaluate as we speak
[5:46:13 PM ET] number
[5:46:14 PM ET] of
[5:46:14 PM ET] i would say that the number of
[5:46:15 PM ET] companies
[5:46:16 PM ET] companies
[5:46:16 PM ET] who
[5:46:17 PM ET] have
[5:46:17 PM ET] who have
[5:46:18 PM ET] a
[5:46:18 PM ET] a
[5:46:19 PM ET] significant
[5:46:20 PM ET] cloud
[5:46:20 PM ET] business
[5:46:21 PM ET] and
[5:46:21 PM ET] a
[5:46:21 PM ET] chip
[5:46:22 PM ET] strong
[5:46:22 PM ET] enough to
[5:46:22 PM ET] sell
[5:46:23 PM ET] significant cloud business and a
[5:46:23 PM ET] externally
[5:46:24 PM ET] is
[5:46:24 PM ET] effectively
[5:46:25 PM ET] two.
[5:46:26 PM ET] chip strong enough to sell externally is effectively two
[5:46:26 PM ET] So there really
[5:46:26 PM ET] aren't
[5:46:26 PM ET] many
[5:46:27 PM ET] customers that
[5:46:27 PM ET] have
[5:46:27 PM ET] to
[5:46:28 PM ET] grapple
[5:46:28 PM ET] with
[5:46:28 PM ET] the
[5:46:29 PM ET] type
[5:46:29 PM ET] of
[5:46:30 PM ET] problem at this
[5:46:30 PM ET] so there really aren't many customers that have to grapple with the same type of problem at this
[5:46:30 PM ET] type
[5:46:31 PM ET] of
[5:46:32 PM ET] scale.
[5:46:32 PM ET] type of scale and
[5:46:33 PM ET] And at this
[5:46:34 PM ET] at this point
[5:46:34 PM ET] point,
[5:46:35 PM ET] everybody's going to be able to do
[5:46:36 PM ET] is
[5:46:36 PM ET] producing
[5:46:37 PM ET] their
[5:46:37 PM ET] advanced
[5:46:38 PM ET] chips with
[5:46:38 PM ET] the
[5:46:39 PM ET] same
[5:46:39 PM ET] everybody is producing their advanced chips
[5:46:40 PM ET] provider.
[5:46:40 PM ET] There's only so many
[5:46:41 PM ET] chips
[5:46:41 PM ET] that
[5:46:41 PM ET] provider can
[5:46:42 PM ET] provide
[5:46:42 PM ET] each
[5:46:43 PM ET] with the same provider there's only so many chips that provider can provide each year
[5:46:43 PM ET] year.
[5:46:43 PM ET] Everybody gets
[5:46:43 PM ET] an
[5:46:45 PM ET] allocation.
[5:46:45 PM ET] and you
[5:46:45 PM ET] have
[5:46:46 PM ET] to
[5:46:46 PM ET] decide what
[5:46:46 PM ET] that
[5:46:47 PM ET] allocation
[5:46:47 PM ET] everybody gets an allocation and you have to decide with that allocation
[5:46:48 PM ET] how
[5:46:48 PM ET] much of it you
[5:46:49 PM ET] want
[5:46:49 PM ET] to
[5:46:50 PM ET] how much of it you wanna sell
[5:46:50 PM ET] sell
[5:46:51 PM ET] externally and how
[5:46:52 PM ET] much of
[5:46:52 PM ET] it you want to
[5:46:52 PM ET] use in your
[5:46:53 PM ET] cloud.
[5:46:53 PM ET] And there's a
[5:46:54 PM ET] trade-off you
[5:46:55 PM ET] externally and how much of it you wanna use in your cloud and there's a trade off you know if you
[5:46:55 PM ET] know, if you sell
[5:46:57 PM ET] externally, you're able
[5:46:57 PM ET] to
[5:46:58 PM ET] realize
[5:46:58 PM ET] more
[5:46:59 PM ET] revenue in
[5:46:59 PM ET] the short
[5:47:00 PM ET] sell externally you're able to realize more revenue in the short
[5:47:00 PM ET] term
[5:47:00 PM ET] because you
[5:47:00 PM ET] get
[5:47:01 PM ET] to
[5:47:01 PM ET] recognize the
[5:47:02 PM ET] revenue
[5:47:02 PM ET] as soon as you
[5:47:02 PM ET] it leads to
[5:47:03 PM ET] leaves
[5:47:03 PM ET] your
[5:47:04 PM ET] inventory.
[5:47:04 PM ET] term because you get to recognize the revenue as soon as it leaves your inventory
[5:47:05 PM ET] and
[5:47:06 PM ET] And on the flip
[5:47:07 PM ET] on the flip side
[5:47:07 PM ET] side, if you decide
[5:47:07 PM ET] to do
[5:47:08 PM ET] use
[5:47:09 PM ET] it
[5:47:09 PM ET] inside
[5:47:10 PM ET] your
[5:47:10 PM ET] if you decide to use it inside your cloud
[5:47:11 PM ET] cloud
[5:47:11 PM ET] in
[5:47:11 PM ET] the
[5:47:11 PM ET] form
[5:47:11 PM ET] of
[5:47:12 PM ET] EC2
[5:47:13 PM ET] instances or
[5:47:13 PM ET] bedrock
[5:47:14 PM ET] in the form of ec two instances or bedrock
[5:47:14 PM ET] you
[5:47:15 PM ET] actually
[5:47:15 PM ET] will
[5:47:15 PM ET] end
[5:47:15 PM ET] up
[5:47:16 PM ET] driving
[5:47:16 PM ET] more
[5:47:17 PM ET] absolute
[5:47:17 PM ET] revenue
[5:47:17 PM ET] and
[5:47:17 PM ET] free cash
[5:47:18 PM ET] flow from
[5:47:19 PM ET] those
[5:47:19 PM ET] actually will end up driving more absolute revenue and free cash flow from those chips
[5:47:19 PM ET] chips because you
[5:47:19 PM ET] get
[5:47:20 PM ET] to
[5:47:20 PM ET] use
[5:47:20 PM ET] them
[5:47:21 PM ET] over, you
[5:47:21 PM ET] know
[5:47:22 PM ET] five
[5:47:22 PM ET] to
[5:47:22 PM ET] six
[5:47:23 PM ET] years.
[5:47:23 PM ET] and
[5:47:24 PM ET] drive
[5:47:24 PM ET] revenue
[5:47:24 PM ET] because you get to use them over you know five to six years
[5:47:24 PM ET] for a long
[5:47:24 PM ET] longer
[5:47:25 PM ET] period of
[5:47:26 PM ET] time.
[5:47:26 PM ET] So it
[5:47:27 PM ET] is
[5:47:27 PM ET] um you
[5:47:27 PM ET] have
[5:47:28 PM ET] to
[5:47:28 PM ET] and drive revenue for a longer period of time
[5:47:28 PM ET] really
[5:47:28 PM ET] think
[5:47:28 PM ET] through what
[5:47:29 PM ET] you
[5:47:29 PM ET] want to
[5:47:29 PM ET] do
[5:47:30 PM ET] date i would
[5:47:30 PM ET] say that
[5:47:30 PM ET] we've
[5:47:31 PM ET] taken
[5:47:31 PM ET] it is you have to really think through what you want to do
[5:47:31 PM ET] a
[5:47:32 PM ET] different
[5:47:33 PM ET] approach in
[5:47:33 PM ET] how we're going to do
[5:47:33 PM ET] we've
[5:47:34 PM ET] used
[5:47:34 PM ET] our
[5:47:34 PM ET] chips than
[5:47:34 PM ET] to date i would say that we've taken a a different approach in how we've used our chips
[5:47:35 PM ET] the
[5:47:35 PM ET] other
[5:47:36 PM ET] provider
[5:47:36 PM ET] who
[5:47:37 PM ET] has
[5:47:37 PM ET] this
[5:47:37 PM ET] same type
[5:47:38 PM ET] of
[5:47:38 PM ET] balancing
[5:47:39 PM ET] act going
[5:47:39 PM ET] than the other provider who has the same type of balancing act going on
[5:47:40 PM ET] on.
[5:47:40 PM ET] and you
[5:47:40 PM ET] know,
[5:47:40 PM ET] as I
[5:47:41 PM ET] mentioned
[5:47:42 PM ET] as i mentioned earlier
[5:47:42 PM ET] earlier,
[5:47:43 PM ET] uh we
[5:47:43 PM ET] believe
[5:47:43 PM ET] we're going to be able to do
[5:47:43 PM ET] have
[5:47:44 PM ET] a
[5:47:44 PM ET] very
[5:47:44 PM ET] significant
[5:47:45 PM ET] business
[5:47:45 PM ET] selling
[5:47:46 PM ET] chips
[5:47:47 PM ET] externally and we're going
[5:47:47 PM ET] we believe we're going to have a very significant business
[5:47:47 PM ET] to
[5:47:48 PM ET] start in
[5:47:48 PM ET] late
[5:47:49 PM ET] twenty twenty
[5:47:50 PM ET] and
[5:47:50 PM ET] we will
[5:47:50 PM ET] selling chips externally and we're going to start in late twenty twenty seven
[5:47:50 PM ET] be
[5:47:51 PM ET] thinking
[5:47:51 PM ET] through
[5:47:51 PM ET] that
[5:47:52 PM ET] balance, I
[5:47:53 PM ET] and we will be thinking through that balance i think
[5:47:53 PM ET] think,
[5:47:53 PM ET] probably
[5:47:54 PM ET] every
[5:47:54 PM ET] probably every year
[5:47:54 PM ET] year.
[5:47:55 PM ET] But they'll
[5:47:55 PM ET] both
[5:47:55 PM ET] be
[5:47:56 PM ET] very
[5:47:57 PM ET] significant
[5:47:58 PM ET] that our our
[5:47:59 PM ET] ability to
[5:47:59 PM ET] but they'll both be very significant our
[5:48:00 PM ET] create
[5:48:00 PM ET] price
[5:48:01 PM ET] performance
[5:48:01 PM ET] scalable
[5:48:02 PM ET] chips is going
[5:48:02 PM ET] our ability to create price performance scalable chips
[5:48:02 PM ET] to
[5:48:03 PM ET] be
[5:48:03 PM ET] a
[5:48:04 PM ET] very
[5:48:04 PM ET] significant
[5:48:05 PM ET] strategic
[5:48:05 PM ET] advantage for
[5:48:06 PM ET] us.
[5:48:06 PM ET] at
[5:48:07 PM ET] is gonna be a very significant strategic advantage for us
[5:48:07 PM ET] scale
[5:48:07 PM ET] both
[5:48:07 PM ET] in our
[5:48:08 PM ET] own
[5:48:08 PM ET] cost
[5:48:09 PM ET] structure as
[5:48:09 PM ET] well
[5:48:09 PM ET] in
[5:48:09 PM ET] building
[5:48:10 PM ET] a
[5:48:10 PM ET] separate
[5:48:11 PM ET] business and
[5:48:11 PM ET] selling
[5:48:11 PM ET] at scale both in our own cost structure as well as in building a separate business
[5:48:11 PM ET] external
[5:48:12 PM ET] chips and
[5:48:12 PM ET] selling
[5:48:13 PM ET] external chips
[5:48:13 PM ET] really
[5:48:13 PM ET] is
[5:48:14 PM ET] a
[5:48:14 PM ET] a very different
[5:48:15 PM ET] business
[5:48:15 PM ET] than
[5:48:15 PM ET] your
[5:48:15 PM ET] cloud
[5:48:15 PM ET] selling external chips and selling external chips really is a very different business than your cloud
[5:48:16 PM ET] infrastructure
[5:48:16 PM ET] infrastructure business
[5:48:17 PM ET] business.
[5:48:21 PM ET] Thank
[5:48:22 PM ET] you.
[5:48:23 PM ET] Our next
[5:48:23 PM ET] question comes from
[5:48:23 PM ET] the
[5:48:24 PM ET] line
[5:48:24 PM ET] of
[5:48:25 PM ET] Doug
[5:48:25 PM ET] thank you our next question comes from the line of
[5:48:25 PM ET] Anmuth
[5:48:26 PM ET] with
[5:48:26 PM ET] J.P.
[5:48:27 PM ET] doug anmuth with jpmorgan
[5:48:27 PM ET] Morgan.
[5:48:27 PM ET] Please
[5:48:28 PM ET] proceed
[5:48:28 PM ET] with
[5:48:28 PM ET] your
[5:48:29 PM ET] please proceed with your question
[5:48:29 PM ET] question.
[5:48:31 PM ET] Thanks for taking the
[5:48:32 PM ET] questions.
[5:48:33 PM ET] When you
[5:48:33 PM ET] think
[5:48:33 PM ET] about
[5:48:33 PM ET] the
[5:48:34 PM ET] 40%
[5:48:34 PM ET] plus
[5:48:35 PM ET] thanks for taking questions when you think about the forty percent plus
[5:48:35 PM ET] AWS
[5:48:36 PM ET] revenue
[5:48:36 PM ET] growth each
[5:48:36 PM ET] of
[5:48:36 PM ET] the next
[5:48:37 PM ET] two
[5:48:38 PM ET] years and then
[5:48:38 PM ET] the
[5:48:38 PM ET] multi-year
[5:48:39 PM ET] path
[5:48:39 PM ET] beyond
[5:48:39 PM ET] aws revenue growth each of the next two years and then the multi year path beyond that
[5:48:40 PM ET] that.
[5:48:40 PM ET] Can you
[5:48:40 PM ET] just
[5:48:41 PM ET] talk
[5:48:41 PM ET] about
[5:48:41 PM ET] the
[5:48:42 PM ET] CapEx
[5:48:43 PM ET] required to
[5:48:43 PM ET] drive
[5:48:43 PM ET] that kind
[5:48:44 PM ET] of
[5:48:45 PM ET] can you just talk about the capex required to drive that kind of revenue
[5:48:45 PM ET] revenue.
[5:48:45 PM ET] over the next
[5:48:46 PM ET] couple of
[5:48:46 PM ET] years and
[5:48:47 PM ET] beyond.
[5:48:48 PM ET] And then also,
[5:48:49 PM ET] Andy,
[5:48:49 PM ET] any
[5:48:49 PM ET] updates
[5:48:49 PM ET] over the next couple of years and beyond and then also andy any
[5:48:50 PM ET] just to how
[5:48:50 PM ET] you're
[5:48:50 PM ET] thinking
[5:48:51 PM ET] about
[5:48:51 PM ET] the
[5:48:52 PM ET] duration
[5:48:52 PM ET] of
[5:48:53 PM ET] returns
[5:48:53 PM ET] on
[5:48:53 PM ET] both
[5:48:54 PM ET] updates just to how you're thinking about the duration of returns on both
[5:48:54 PM ET] servers and
[5:48:55 PM ET] networking and
[5:48:55 PM ET] then
[5:48:55 PM ET] also
[5:48:56 PM ET] data
[5:48:56 PM ET] servers and networking and then also data centers
[5:48:56 PM ET] centers.
[5:48:57 PM ET] thanks
[5:48:57 PM ET] Thanks.
[5:48:59 PM ET] Yeah.
[5:48:59 PM ET] I'll take
[5:48:59 PM ET] them
[5:49:00 PM ET] in
[5:49:00 PM ET] reverse
[5:49:01 PM ET] order.
[5:49:01 PM ET] Uh so
[5:49:02 PM ET] on
[5:49:02 PM ET] yeah i'll take them in reverse order so
[5:49:03 PM ET] um
[5:49:03 PM ET] the
[5:49:03 PM ET] break
[5:49:04 PM ET] on
[5:49:05 PM ET] our
[5:49:06 PM ET] infrastructure.
[5:49:06 PM ET] as I
[5:49:07 PM ET] mentioned in
[5:49:07 PM ET] my
[5:49:07 PM ET] the breakeven on our infrastructure
[5:49:07 PM ET] opening
[5:49:08 PM ET] comments
[5:49:08 PM ET] we're
[5:49:09 PM ET] continuing
[5:49:09 PM ET] to
[5:49:09 PM ET] move
[5:49:09 PM ET] that
[5:49:10 PM ET] left.
[5:49:10 PM ET] we're continuing
[5:49:10 PM ET] to
[5:49:11 PM ET] as i mentioned in my opening comments we're continuing to move that left
[5:49:11 PM ET] make
[5:49:11 PM ET] that
[5:49:12 PM ET] shorter.
[5:49:13 PM ET] There, you
[5:49:14 PM ET] we're continuing to make that shorter
[5:49:14 PM ET] know there
[5:49:14 PM ET] are a lot
[5:49:15 PM ET] of
[5:49:15 PM ET] you
[5:49:16 PM ET] cores, a little bit
[5:49:16 PM ET] different
[5:49:16 PM ET] from AI.
[5:49:17 PM ET] a little
[5:49:17 PM ET] bit
[5:49:18 PM ET] different
[5:49:18 PM ET] from
[5:49:18 PM ET] how
[5:49:18 PM ET] are a lot of cores little bit different from ais
[5:49:18 PM ET] you
[5:49:19 PM ET] finance
[5:49:19 PM ET] these
[5:49:20 PM ET] things.
[5:49:21 PM ET] And so it
[5:49:21 PM ET] varies depending
[5:49:21 PM ET] on
[5:49:22 PM ET] what you're talking
[5:49:22 PM ET] bit different from how you finance these things and so it it varies depending on which you're
[5:49:22 PM ET] about, but
[5:49:23 PM ET] we're
[5:49:23 PM ET] continuing
[5:49:23 PM ET] to
[5:49:23 PM ET] make
[5:49:24 PM ET] progress as we
[5:49:25 PM ET] historically
[5:49:25 PM ET] have been
[5:49:25 PM ET] pretty
[5:49:26 PM ET] good
[5:49:26 PM ET] at
[5:49:26 PM ET] doing if
[5:49:27 PM ET] you
[5:49:27 PM ET] think
[5:49:27 PM ET] talking about but we're continuing to make progress as we historically have been pretty good at doing if you think
[5:49:27 PM ET] about
[5:49:29 PM ET] AWS at
[5:49:29 PM ET] finding
[5:49:29 PM ET] ways
[5:49:30 PM ET] to
[5:49:30 PM ET] extend
[5:49:30 PM ET] useful
[5:49:31 PM ET] lives
[5:49:31 PM ET] and
[5:49:32 PM ET] about aws at finding ways to extend useful lives and to
[5:49:32 PM ET] to
[5:49:32 PM ET] make
[5:49:33 PM ET] the
[5:49:33 PM ET] break
[5:49:33 PM ET] even
[5:49:34 PM ET] sooner and we're
[5:49:34 PM ET] making good
[5:49:35 PM ET] progress
[5:49:35 PM ET] there
[5:49:36 PM ET] too.
[5:49:36 PM ET] on
[5:49:37 PM ET] make the break even sooner and and we're making good progress there too
[5:49:37 PM ET] the
[5:49:37 PM ET] on the
[5:49:39 PM ET] you know, on the on the
[5:49:39 PM ET] capex
[5:49:40 PM ET] involved to
[5:49:40 PM ET] grow
[5:49:40 PM ET] the
[5:49:40 PM ET] way
[5:49:41 PM ET] we're
[5:49:41 PM ET] talking
[5:49:41 PM ET] about,
[5:49:42 PM ET] it's
[5:49:42 PM ET] meaningful.
[5:49:43 PM ET] on the capex involved to grow the way we're talking about it's meaningful
[5:49:44 PM ET] you know and and uh you
[5:49:44 PM ET] know i
[5:49:44 PM ET] think that
[5:49:45 PM ET] this the
[5:49:46 PM ET] way
[5:49:46 PM ET] we
[5:49:46 PM ET] think about
[5:49:47 PM ET] it
[5:49:47 PM ET] Doug, is
[5:49:47 PM ET] and i think that this the way we think about it
[5:49:48 PM ET] doug is that
[5:49:48 PM ET] that
[5:49:48 PM ET] this
[5:49:49 PM ET] is
[5:49:49 PM ET] a
[5:49:49 PM ET] once in
[5:49:51 PM ET] a lifetime
[5:49:51 PM ET] opportunity.
[5:49:52 PM ET] You know, I think what
[5:49:52 PM ET] we're
[5:49:53 PM ET] this is a once in a lifetime opportunity
[5:49:53 PM ET] seeing with AI.
[5:49:53 PM ET] it's
[5:49:54 PM ET] the
[5:49:54 PM ET] biggest
[5:49:55 PM ET] transformation in
[5:49:55 PM ET] our
[5:49:56 PM ET] i think what we're seeing with ai it's the biggest transformation in our lifetime
[5:49:56 PM ET] lifetime.
[5:49:57 PM ET] And
[5:49:57 PM ET] and
[5:49:58 PM ET] if you
[5:49:58 PM ET] know the
[5:49:59 PM ET] idea
[5:49:59 PM ET] of
[5:49:59 PM ET] being able
[5:49:59 PM ET] to
[5:50:00 PM ET] grow
[5:50:01 PM ET] 39%
[5:50:01 PM ET] if you know the idea of being able to grow thirty nine percent
[5:50:02 PM ET] with
[5:50:03 PM ET] $184
[5:50:03 PM ET] billion
[5:50:03 PM ET] annual run
[5:50:05 PM ET] with one hundred and eighty four billion dollars annual run rate
[5:50:05 PM ET] rate and to
[5:50:05 PM ET] grow
[5:50:06 PM ET] 40% a
[5:50:07 PM ET] year
[5:50:07 PM ET] on
[5:50:07 PM ET] top of the
[5:50:08 PM ET] that
[5:50:08 PM ET] in you
[5:50:09 PM ET] know each
[5:50:09 PM ET] of
[5:50:09 PM ET] the
[5:50:10 PM ET] next two
[5:50:10 PM ET] and to grow forty percent a year on top of that in each of the next
[5:50:10 PM ET] years and the
[5:50:11 PM ET] they ultimately end
[5:50:12 PM ET] two years and they ultimately end up
[5:50:12 PM ET] up
[5:50:12 PM ET] as
[5:50:13 PM ET] a
[5:50:13 PM ET] trillion
[5:50:14 PM ET] dollar plus
[5:50:15 PM ET] business.
[5:50:15 PM ET] we're going
[5:50:16 PM ET] to
[5:50:16 PM ET] invest
[5:50:17 PM ET] as a trillion dollar plus business
[5:50:17 PM ET] to
[5:50:17 PM ET] continue
[5:50:17 PM ET] being the
[5:50:18 PM ET] leader.
[5:50:19 PM ET] We are the
[5:50:19 PM ET] leader
[5:50:20 PM ET] we're gonna invest to continue being the leader we are the leader today
[5:50:20 PM ET] today.
[5:50:21 PM ET] in
[5:50:22 PM ET] in
[5:50:22 PM ET] you know, the, I'll call
[5:50:22 PM ET] it
[5:50:23 PM ET] the
[5:50:24 PM ET] infrastructure
[5:50:24 PM ET] and
[5:50:24 PM ET] AI
[5:50:25 PM ET] space.
[5:50:26 PM ET] the i'll call it the infrastructure and ai space and
[5:50:26 PM ET] and um
[5:50:27 PM ET] you know would
[5:50:27 PM ET] it
[5:50:27 PM ET] be
[5:50:28 PM ET] more
[5:50:29 PM ET] convenient?
[5:50:29 PM ET] would it be more convenient
[5:50:29 PM ET] if
[5:50:30 PM ET] this
[5:50:30 PM ET] type
[5:50:31 PM ET] of
[5:50:32 PM ET] acceleration and
[5:50:32 PM ET] opportunity is a very important
[5:50:33 PM ET] happened
[5:50:33 PM ET] over 20
[5:50:34 PM ET] 25
[5:50:34 PM ET] if this type of acceleration and opportunity
[5:50:34 PM ET] years and
[5:50:35 PM ET] you
[5:50:35 PM ET] could
[5:50:35 PM ET] spread
[5:50:35 PM ET] the
[5:50:36 PM ET] capex
[5:50:36 PM ET] over 25
[5:50:37 PM ET] opportunity happened over twenty five years and you could spread the capex over twenty five years
[5:50:37 PM ET] years.
[5:50:38 PM ET] Yeah, it might be a
[5:50:38 PM ET] more
[5:50:39 PM ET] convenient but
[5:50:39 PM ET] that's
[5:50:39 PM ET] not the
[5:50:40 PM ET] world that we
[5:50:40 PM ET] live
[5:50:40 PM ET] in and
[5:50:41 PM ET] that's not
[5:50:41 PM ET] the
[5:50:42 PM ET] yeah it might be more convenient but that's not the world that we live in and that's not the opportunity
[5:50:42 PM ET] opportunity.
[5:50:43 PM ET] and
[5:50:44 PM ET] um and
[5:50:44 PM ET] we
[5:50:44 PM ET] and we
[5:50:45 PM ET] we
[5:50:45 PM ET] can
[5:50:45 PM ET] fund
[5:50:46 PM ET] this
[5:50:46 PM ET] we can fund this plan
[5:50:46 PM ET] plan.
[5:50:47 PM ET] um and I think it
[5:50:48 PM ET] will
[5:50:48 PM ET] forever
[5:50:49 PM ET] change
[5:50:49 PM ET] the
[5:50:49 PM ET] size of
[5:50:50 PM ET] Amazon.
[5:50:50 PM ET] It will ever
[5:50:51 PM ET] and i think it will forever change the size of amazon will ever change
[5:50:51 PM ET] change
[5:50:52 PM ET] it will forever
[5:50:52 PM ET] change
[5:50:52 PM ET] our
[5:50:53 PM ET] revenue.
[5:50:53 PM ET] It will
[5:50:54 PM ET] forever
[5:50:54 PM ET] change our
[5:50:54 PM ET] free
[5:50:54 PM ET] cash
[5:50:56 PM ET] flow, and
[5:50:56 PM ET] our revenue it will forever change our free cash flow
[5:50:56 PM ET] we're going
[5:50:56 PM ET] to
[5:50:56 PM ET] invest and
[5:50:57 PM ET] we're going
[5:50:57 PM ET] to
[5:50:57 PM ET] pursue
[5:50:57 PM ET] it to
[5:50:58 PM ET] continue
[5:50:58 PM ET] be
[5:50:58 PM ET] to the
[5:50:59 PM ET] significant
[5:50:59 PM ET] leader like we
[5:50:59 PM ET] are
[5:51:00 PM ET] and we're going to invest and we're going to pursue it to continue to be the significant leader like we are today
[5:51:00 PM ET] today.
[5:51:06 PM ET] Thank
[5:51:07 PM ET] you.
[5:51:08 PM ET] thank you
[5:51:08 PM ET] And our final
[5:51:09 PM ET] question comes from the
[5:51:09 PM ET] line
[5:51:10 PM ET] of
[5:51:10 PM ET] Ross
[5:51:11 PM ET] Sandler with
[5:51:12 PM ET] and our final question comes from the line of ross sandler with barclays
[5:51:12 PM ET] Barclays.
[5:51:13 PM ET] Please
[5:51:13 PM ET] proceed with
[5:51:13 PM ET] your
[5:51:14 PM ET] please proceed with your question
[5:51:15 PM ET] question.
[5:51:16 PM ET] Great.
[5:51:17 PM ET] Yeah, I thought I'd
[5:51:17 PM ET] double
[5:51:17 PM ET] down
[5:51:18 PM ET] great yes thought i'd double down on
[5:51:18 PM ET] on the
[5:51:18 PM ET] bedrock.
[5:51:20 PM ET] question.
[5:51:21 PM ET] So the
[5:51:21 PM ET] token
[5:51:22 PM ET] marketplace on
[5:51:23 PM ET] Bedrock
[5:51:23 PM ET] the bedrock question so the
[5:51:23 PM ET] seems
[5:51:23 PM ET] to
[5:51:24 PM ET] be one of the most
[5:51:25 PM ET] these hot the
[5:51:25 PM ET] hottest
[5:51:26 PM ET] services
[5:51:26 PM ET] token marketplace on bedrock seems to be one of these the hottest services
[5:51:26 PM ET] in
[5:51:27 PM ET] AI
[5:51:27 PM ET] right
[5:51:28 PM ET] in ai right now
[5:51:28 PM ET] now.
[5:51:29 PM ET] And our understanding
[5:51:29 PM ET] is more
[5:51:30 PM ET] the majority of the
[5:51:30 PM ET] these
[5:51:31 PM ET] workloads
[5:51:31 PM ET] and our understanding is the majority of these workloads are
[5:51:31 PM ET] are
[5:51:32 PM ET] running
[5:51:32 PM ET] on
[5:51:33 PM ET] running on trainium
[5:51:33 PM ET] tranium.
[5:51:34 PM ET] So is
[5:51:34 PM ET] this
[5:51:35 PM ET] becomes a
[5:51:35 PM ET] bigger
[5:51:35 PM ET] part of
[5:51:36 PM ET] the
[5:51:36 PM ET] overall
[5:51:37 PM ET] AWS
[5:51:38 PM ET] story,
[5:51:38 PM ET] so as this becomes a bigger part of the overall aws story
[5:51:38 PM ET] like you just
[5:51:39 PM ET] mentioned,
[5:51:39 PM ET] Andy, how
[5:51:40 PM ET] might
[5:51:40 PM ET] like you just mentioned andy how how might that
[5:51:40 PM ET] that
[5:51:41 PM ET] impact
[5:51:41 PM ET] both
[5:51:42 PM ET] revenue
[5:51:43 PM ET] growth, but
[5:51:44 PM ET] impact both revenue growth but especially
[5:51:44 PM ET] especially
[5:51:45 PM ET] margins at
[5:51:46 PM ET] AWS as you kind of
[5:51:47 PM ET] shift
[5:51:47 PM ET] margins at aws as you kind of shift from
[5:51:48 PM ET] from
[5:51:48 PM ET] selling
[5:51:48 PM ET] bare
[5:51:49 PM ET] metal
[5:51:49 PM ET] to
[5:51:49 PM ET] selling
[5:51:50 PM ET] selling bare metal to selling more
[5:51:50 PM ET] more
[5:51:51 PM ET] inferences as
[5:51:51 PM ET] a
[5:51:52 PM ET] service could
[5:51:52 PM ET] you just talk
[5:51:52 PM ET] about
[5:51:53 PM ET] that? Thank
[5:51:54 PM ET] inference as a service could you just talk about that thank you
[5:51:54 PM ET] you.
[5:51:55 PM ET] Yeah.
[5:51:55 PM ET] uh
[5:51:56 PM ET] yeah well
[5:51:56 PM ET] well you
[5:51:57 PM ET] know,
[5:51:57 PM ET] you're
[5:51:57 PM ET] right
[5:51:57 PM ET] that
[5:51:58 PM ET] the
[5:51:59 PM ET] you're right that the
[5:51:59 PM ET] majority of
[5:52:01 PM ET] um
[5:52:01 PM ET] majority
[5:52:01 PM ET] and
[5:52:01 PM ET] most
[5:52:02 PM ET] of bedrock
[5:52:02 PM ET] day.
[5:52:03 PM ET] is
[5:52:03 PM ET] being
[5:52:03 PM ET] run
[5:52:03 PM ET] on
[5:52:04 PM ET] top
[5:52:04 PM ET] of
[5:52:05 PM ET] tranium
[5:52:06 PM ET] and most of bedrock day is being run on top of trainium
[5:52:06 PM ET] and
[5:52:07 PM ET] we we
[5:52:07 PM ET] do
[5:52:08 PM ET] that
[5:52:08 PM ET] in
[5:52:08 PM ET] meaningful
[5:52:09 PM ET] part
[5:52:09 PM ET] because
[5:52:09 PM ET] we
[5:52:10 PM ET] really love
[5:52:10 PM ET] and we do that meaningful part because we really like
[5:52:11 PM ET] like
[5:52:12 PM ET] um
[5:52:12 PM ET] the
[5:52:12 PM ET] price
[5:52:13 PM ET] performance that
[5:52:13 PM ET] we're going to be
[5:52:14 PM ET] getting and
[5:52:14 PM ET] it
[5:52:14 PM ET] allows
[5:52:14 PM ET] us
[5:52:14 PM ET] to
[5:52:16 PM ET] the price performance that we're getting and it allows us to keep
[5:52:16 PM ET] keep to
[5:52:16 PM ET] both
[5:52:17 PM ET] keep
[5:52:17 PM ET] prices as low
[5:52:18 PM ET] as
[5:52:18 PM ET] possible
[5:52:18 PM ET] for
[5:52:20 PM ET] customers
[5:52:20 PM ET] as
[5:52:20 PM ET] well
[5:52:20 PM ET] to both keep prices as low as possible for customers
[5:52:21 PM ET] as
[5:52:22 PM ET] our
[5:52:22 PM ET] ability
[5:52:23 PM ET] to you
[5:52:23 PM ET] know, we'd
[5:52:23 PM ET] love
[5:52:23 PM ET] like
[5:52:24 PM ET] as well as our ability we like the
[5:52:24 PM ET] the
[5:52:24 PM ET] margins
[5:52:25 PM ET] associated
[5:52:25 PM ET] with
[5:52:26 PM ET] it you
[5:52:26 PM ET] know
[5:52:26 PM ET] if you think
[5:52:28 PM ET] about
[5:52:28 PM ET] margins and
[5:52:28 PM ET] in the
[5:52:29 PM ET] cloud
[5:52:29 PM ET] the margins associated with it if you think about
[5:52:30 PM ET] space and you're looking
[5:52:30 PM ET] at
[5:52:31 PM ET] different
[5:52:31 PM ET] players
[5:52:32 PM ET] and and
[5:52:32 PM ET] margins in the cloud space and you're looking at
[5:52:32 PM ET] how you
[5:52:32 PM ET] know what
[5:52:33 PM ET] their
[5:52:33 PM ET] costs
[5:52:33 PM ET] structure
[5:52:33 PM ET] looks
[5:52:34 PM ET] different players and what their cost structure looks like
[5:52:35 PM ET] like
[5:52:35 PM ET] There are a few
[5:52:36 PM ET] things to
[5:52:36 PM ET] pay
[5:52:36 PM ET] attention
[5:52:37 PM ET] to you know
[5:52:37 PM ET] the
[5:52:37 PM ET] first
[5:52:38 PM ET] there are a few things to pay attention to the first is
[5:52:38 PM ET] is for
[5:52:38 PM ET] their
[5:52:39 PM ET] data
[5:52:40 PM ET] for their data centers
[5:52:40 PM ET] centers,
[5:52:40 PM ET] how
[5:52:40 PM ET] many
[5:52:40 PM ET] of them
[5:52:41 PM ET] are
[5:52:41 PM ET] they
[5:52:42 PM ET] actually you
[5:52:42 PM ET] know,
[5:52:42 PM ET] how many of them are they actually do you know
[5:52:43 PM ET] buying or
[5:52:44 PM ET] long
[5:52:45 PM ET] buying or long leasing
[5:52:45 PM ET] leasing
[5:52:46 PM ET] versus
[5:52:47 PM ET] versus
[5:52:47 PM ET] to
[5:52:48 PM ET] colo
[5:52:48 PM ET] or
[5:52:49 PM ET] neoclass.
[5:52:49 PM ET] i mean
[5:52:49 PM ET] neoclouds
[5:52:49 PM ET] are
[5:52:50 PM ET] about
[5:52:52 PM ET] 3,500 basis
[5:52:52 PM ET] doing colo or neo clouds i mean neo clouds are about
[5:52:52 PM ET] points worth
[5:52:53 PM ET] worse
[5:52:53 PM ET] and
[5:52:53 PM ET] in
[5:52:53 PM ET] operating
[5:52:54 PM ET] margin
[5:52:54 PM ET] thirty five hundred basis points worse in operating margin
[5:52:55 PM ET] than
[5:52:55 PM ET] if
[5:52:55 PM ET] you
[5:52:56 PM ET] long
[5:52:56 PM ET] lease
[5:52:56 PM ET] them.
[5:52:57 PM ET] than if you long lease them so
[5:52:57 PM ET] So, you know, and
[5:52:58 PM ET] then
[5:52:58 PM ET] you
[5:52:58 PM ET] look
[5:52:59 PM ET] then you look at
[5:52:59 PM ET] at
[5:53:00 PM ET] you
[5:53:01 PM ET] what
[5:53:02 PM ET] is
[5:53:02 PM ET] the
[5:53:02 PM ET] hard
[5:53:03 PM ET] on top of
[5:53:04 PM ET] what is the hardware on top of
[5:53:04 PM ET] which they're
[5:53:05 PM ET] running
[5:53:06 PM ET] and you know
[5:53:07 PM ET] the
[5:53:07 PM ET] i
[5:53:07 PM ET] which they're running and you know the if
[5:53:07 PM ET] if
[5:53:08 PM ET] if
[5:53:08 PM ET] if you're
[5:53:08 PM ET] you're if
[5:53:09 PM ET] you
[5:53:09 PM ET] use
[5:53:10 PM ET] you're using
[5:53:11 PM ET] using um
[5:53:11 PM ET] the
[5:53:11 PM ET] hardware
[5:53:12 PM ET] that
[5:53:12 PM ET] everybody
[5:53:13 PM ET] else is
[5:53:13 PM ET] the hardware that everybody else is using
[5:53:14 PM ET] using.
[5:53:14 PM ET] you'll
[5:53:15 PM ET] have
[5:53:15 PM ET] a
[5:53:16 PM ET] comparable
[5:53:16 PM ET] cost
[5:53:16 PM ET] structure
[5:53:17 PM ET] to
[5:53:17 PM ET] what
[5:53:17 PM ET] everybody
[5:53:17 PM ET] is
[5:53:18 PM ET] doing and if you
[5:53:18 PM ET] you'll have a comparable cost structure to what everybody is doing
[5:53:19 PM ET] have
[5:53:19 PM ET] the
[5:53:19 PM ET] ability
[5:53:19 PM ET] to
[5:53:20 PM ET] use
[5:53:20 PM ET] and if you have the ability to use
[5:53:21 PM ET] hardware
[5:53:21 PM ET] that's
[5:53:22 PM ET] different, you'll
[5:53:22 PM ET] hardware that's different
[5:53:22 PM ET] have
[5:53:22 PM ET] an
[5:53:23 PM ET] advantage.
[5:53:24 PM ET] and so I think when
[5:53:25 PM ET] you when you
[5:53:25 PM ET] look
[5:53:25 PM ET] at
[5:53:25 PM ET] what
[5:53:26 PM ET] we're
[5:53:26 PM ET] doing most of the
[5:53:27 PM ET] 'll have an advantage and so i think when you when you look at what we're doing
[5:53:27 PM ET] our
[5:53:28 PM ET] capacity
[5:53:29 PM ET] most of our capacity is
[5:53:29 PM ET] is
[5:53:30 PM ET] either
[5:53:30 PM ET] owned
[5:53:30 PM ET] or
[5:53:31 PM ET] long.
[5:53:32 PM ET] long
[5:53:33 PM ET] leased which
[5:53:33 PM ET] is, you
[5:53:33 PM ET] know
[5:53:34 PM ET] either owned or long long leased
[5:53:34 PM ET] um
[5:53:35 PM ET] it
[5:53:36 PM ET] enjoys
[5:53:36 PM ET] better
[5:53:37 PM ET] operating
[5:53:37 PM ET] which is you know
[5:53:37 PM ET] margins
[5:53:37 PM ET] than
[5:53:37 PM ET] what you
[5:53:38 PM ET] you'll find
[5:53:38 PM ET] when
[5:53:38 PM ET] people are
[5:53:39 PM ET] mostly
[5:53:39 PM ET] doing
[5:53:40 PM ET] colo or
[5:53:40 PM ET] neo
[5:53:40 PM ET] enjoys better operating margins than what you'll find when people are mostly doing
[5:53:40 PM ET] or big
[5:53:41 PM ET] chunk
[5:53:41 PM ET] doing
[5:53:41 PM ET] colo or
[5:53:42 PM ET] neo
[5:53:43 PM ET] And the fact
[5:53:44 PM ET] that
[5:53:44 PM ET] colo or neo or a big chunk doing colo or neo
[5:53:44 PM ET] we're
[5:53:44 PM ET] running
[5:53:45 PM ET] on top
[5:53:45 PM ET] of
[5:53:45 PM ET] our
[5:53:46 PM ET] and the fact that we're running on top of our own
[5:53:46 PM ET] own
[5:53:47 PM ET] chip
[5:53:47 PM ET] that's
[5:53:48 PM ET] providing
[5:53:48 PM ET] chip that's providing
[5:53:49 PM ET] both
[5:53:49 PM ET] both
[5:53:50 PM ET] uh
[5:53:50 PM ET] advantage
[5:53:51 PM ET] price
[5:53:52 PM ET] performance
[5:53:52 PM ET] advantage price performance
[5:53:53 PM ET] and
[5:53:53 PM ET] it's
[5:53:53 PM ET] more
[5:53:53 PM ET] cost
[5:53:54 PM ET] effective for
[5:53:55 PM ET] ourselves
[5:53:55 PM ET] because
[5:53:55 PM ET] we
[5:53:56 PM ET] own
[5:53:56 PM ET] it.
[5:53:57 PM ET] I think gives
[5:53:57 PM ET] and it's more cost effective for ourselves because we own it
[5:53:57 PM ET] us
[5:53:57 PM ET] some
[5:53:58 PM ET] structural
[5:53:58 PM ET] cost
[5:53:59 PM ET] advantages that
[5:53:59 PM ET] I think
[5:54:00 PM ET] are going
[5:54:00 PM ET] to
[5:54:00 PM ET] be
[5:54:00 PM ET] very
[5:54:01 PM ET] helpful
[5:54:01 PM ET] to
[5:54:01 PM ET] i think gives us some structural cost advantages that i think are going to be very helpful
[5:54:02 PM ET] customers as we
[5:54:02 PM ET] pass them
[5:54:02 PM ET] back
[5:54:03 PM ET] to
[5:54:04 PM ET] customers and
[5:54:04 PM ET] helpful to
[5:54:04 PM ET] the
[5:54:05 PM ET] overall
[5:54:05 PM ET] economics
[5:54:05 PM ET] of
[5:54:06 PM ET] customers as we pass them back to customers and helpful to the overall economics of aws
[5:54:07 PM ET] AWS.
[5:54:09 PM ET] Thanks for joining
[5:54:10 PM ET] us for
[5:54:10 PM ET] the
[5:54:10 PM ET] call
[5:54:11 PM ET] today and for your
[5:54:11 PM ET] thanks for joining us for
[5:54:11 PM ET] questions.
[5:54:12 PM ET] A replay
[5:54:12 PM ET] will
[5:54:12 PM ET] be
[5:54:13 PM ET] available on
[5:54:13 PM ET] our
[5:54:13 PM ET] Investor
[5:54:13 PM ET] Relations
[5:54:14 PM ET] website for at least a
[5:54:15 PM ET] three
[5:54:15 PM ET] the call today and for your questions a replay will be available on our investor relations website for at least
[5:54:16 PM ET] months.
[5:54:16 PM ET] We appreciate
[5:54:16 PM ET] your
[5:54:17 PM ET] interest in
[5:54:17 PM ET] Amazon
[5:54:17 PM ET] and look at
[5:54:17 PM ET] forward to the
[5:54:18 PM ET] speaking with
[5:54:18 PM ET] you
[5:54:19 PM ET] again
[5:54:19 PM ET] next
[5:54:19 PM ET] three months we appreciate your interest in amazon and look forward to speaking with you again next quarter
[5:54:20 PM ET] quarter.
[5:54:25 PM ET] Mm-hmm.
[5:54:29 PM ET] Mm-hmm.
[5:54:30 PM ET] Uh
[5:54:30 PM ET] Yeah,
[5:54:31 PM ET] I'm not sure if I can do it.
[5:54:37 PM ET] Mm-hmm.
[5:54:43 PM ET] Ba duna Ba ba ba

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