AWS faces short-term headwinds, writes Amazon CEO Andy Jassy in a letter to investors dated 13-April-2023, due to companies “being more cautious in spending given the challenging, current macroeconomic conditions.” Nevertheless, Jassy says AWS continues to invest in cloud infrastructure and customer development for the long term.
Some notes from his letter:
- AWS revenue amounted to $80B in 2022, with about 90% of Global IT spending still on-premises and yet to migrate to the cloud.
- The AWS new customer pipeline is robust, as are active migrations.
- AWS continues to deliver new capabilities rapidly (over 3,300 new features and services launched in 2022)
- AWS is investing heavily is Large Language Models (LLMs) and Generative AI for its own use and for customer use.
- AWS delivered its first training chip (“Trainium”) in 2022; and for the most common machine learning models, Trainium-based instances are up to 140% faster than GPU-based instances at up to 70% lower cost.
- AWS launched its first inference chips (“Inferentia”) in 2019. The Inferentia2 chip, which just launched, offers up to four times higher throughput and ten times lower latency than ther predecessor.
- Graviton3 chips, which launched in 2022, are providing 25% better performance than the Graviton2 processors
- The Kuiper project to create a low-Earth orbit satellite system for broadband internet service shares several similarities to AWS in that it’s capital intensive at the start, but has a large prospective consumer, enterprise, and government customer base, significant revenue and operating profit potential, and relatively few companies with the technical and inventive aptitude, as well as the investment hypothesis to go after it.
The full letter is here: https://s2.q4cdn.com/299287126/files/doc_downloads/AnnualMeetingMaterials/2023/2022-Shareholder-Letter.pdf