Amazon Says "Game On" with AWS AI Response
Breaking Analysis from John Rossman
BONUS ISSUE of The Digital Leader Newsletter
OpenAI, Nvidia, Microsoft and Google Cloud were all having a pretty good Thanksgiving. They were WINNING.
And then, AWS Re:Invent happened last week, and Amazon said "it’s time for the big dog to eat.”
A Big Week of Annoucments
AWS announced:
+ A set of foundation LLM models (Nova)
+ AI Model Marketplace
+ AI Chips
+ Super Computer
+Anthropic Strategic Alignment & Investment
It's a coordinated attack on every major AI battlefront. They’re coming for EVERYONE. Amazon is simultaneously challenging OpenAI/Microsoft in foundation models, NVIDIA in chips, xAI in supercomputing, and securing powerful allies like Anthropic and Apple.
With AWS Re:Invent in the books, this is what we have from Amazon:
1. Proprietary LLM Models — Nova
- Six proprietary LLM foundational GenAI models that match or exceed competitors
- Dramatically lower costs and improved performance
- Integrated with Amazon’s Bedrock service
- More to come including speech-to-speech and "any-to-any" models
- Multi-language support
2. Hardware focus taking on Nvidia
- AWS proprietary Trainium2 chips and Inferentia2 with dramatic price/performance improvements
- Customer’s want choice beyond Nvidia
- Apple appeared as a major customer
- Designed by 2015 Amazon acquisition Annapurna Labs
- Next-gen Trainium3 already in development
3. AWS AI Model Marketplace
- Hundreds of speciality and proprietary models available to useAWS proprietary
- All use your AWS permissions, billing, etc
- Easily integrated with your other AWS services via AWS Bedrock service — a fully managed service enableing developers to build and scale generative AI applications efficiently.
- Bedrock provides access to a variety of high-performing foundation models (FMs) from leading AI companies such as AI21 Labs, Anthropic, Cohere, Meta, Mistral AI, Stability AI, and Amazon's own models, all through a single API.
4. Project Rainier: A Cluster Super Computer
- Partnering with Anthropic and utilizing AWS UltraServers built on Trainium2 chips
- According to AWS, “expected to be the world’s largest AI compute cluster reported to date available for Anthropic to build and deploy its future models on.”
- Google and xAI's Colossus challenger
5. The Anthropic Power Play
- $8B investment
- Positioned as preferred cloud provider
- Strategic partner for access and collaboration on Claude development
The most impressive part: Amazon's creating an entire ecosystem. They're simultaneously solving for compute (Project Rainier), chips (Trainium), models (Nova), and partnerships (Anthropic) - all while undercutting everyone's prices.
The Amazon AI Flywheel
But there is one more massive advantage Amazon has — all the ways that Amazon can dogfood AI. In Jeff Bezos interview with Andrew Ross Sorkin last week (coincidence?), he discussed that he has never been working harder with Amazon and the “hundreds of AI use cases” being deployed.
Here’s how I picture a new Amazon AI flywheel. The two distinct advantages Amazon has created are the AI uses cases coming from Amazon, and the number AWS AI Services and Entry Points they have created.
And guess what — Amazon stock popped ~10%.
What did I miss in this analysis? I’d love to hear your feedback!
I continue to think that Amazon is the most interesting company of the digital era. The leadership model, the mechanisms and techniques, the operating model, the “always on offense” mentality is what I've tried to capture in my books and this newsletter.
Announcement this Thursday
Stay tuned for this Thursday’s regularly scheduled newsletter. It will have a Holiday gift for you, your team and your business.
Onward!
John
About The Digital Leader Newsletter
This is a newsletter for change agents, strategists, and innovators. The Digital Leader Newsletter is a weekly coaching session focusing on customer-centricity, innovation, and strategy. We deliver practical theory, examples, tools, and techniques to help you build better strategies, better plans, and better solutions — but most of all, to think and communicate better.
John Rossman is a keynote speaker and advisor on leadership and innovation. Learn more at www.johnrossman.com.