The hardest thing for any growing company to do is manage the transition from hypergrowth to the dual tracks of growth and stability. AWS is entering their Hybrid phase, or the transition from Day 1 to Day 2. How will it go?
SHOW: 946
SHOW TRANSCRIPT: The Cloudcast #946 Transcript
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SHOW NOTES:
- Amazon Q2 (July 2025) Results
- Reviewing Amazon/AWS Q2 2025 Results (CNBC)
- AWS QoQ Earnings Growth Rates (2014-2025)
- Andy Jassy defends Amazon/AWS AI strategy
- Amazon Q2 2025 Earnings Call Transcript
- Update from Andy Jasay Amazon Generative AI (Amazon Internal)
HOW WILL AWS HANDLE DAY 1 AND DAY 2?
- Has AWS missed the Generative AI transformation?
- Not investing in GPUs at the same rate as their cloud market share
- Don’t have a Top 5 Frontier LLM
- Don’t have a productivity suite to attach AI to (on-going revenue)
- Don’t have a leading coding-assistant app
- Don’t have an immediate “acquisition” target (e.g. Anthropic valuation near $150B)
- AWS isn’t breaking out their AI revenues
- AWS’s growth has plateaued over the last 6 quarters (around 17%), while Azure, GCP have been growing at 1.5 to 2x, specifically around AI revenues.
- AWS is up to 18% of Amazon revenue, and current AWS (CPU-based) is driving the majority of Amazon profits.
- Jasay is trying to make AI an add-on to the AWS “building block” model
- GenAI buying (at this point) looks similar to Shadow IT going to public cloud – it’s not centrally controlled
- Is AWS focused on GenAI, or moving the other 80-85% of on-premises to their cloud? Can they manage both priorities at the same time?
- Can you achieve the same levels of growth if non-GenAI startups aren’t getting funding at the same levels as pre-2022?
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