Infinitive is a proud sponsor of AWS re:Invent 2023, taking place from Nov. 27th to Dec. 1st. This event has always been a hub for groundbreaking discussions. Our team has been closely following the industry trends and developments, and we’re excited to share our predictions with you. We’ll start with the most obvious one: Generative AI will undoubtedly take center stage during the conference. Several indicators point towards this assertion, and in this blog, we will go into the reasons why Generative AI will be at the forefront of this event.
1. Economic and Political Climate:
Cloud growth slowed in the third quarter as customers implemented cloud cost containment plans. To be clear – there was growth. It just wasn’t as fast as in the past. However, Generative AI technology and services are emerging as an area that runs counter to the slowing growth in cloud spending. Synergy Research opined that, “The current economic and political climate has crimped some growth in cloud spending, but there is clear evidence that generative AI technology and services are starting to help overcome those barriers.” Meanwhile, Gartner estimates that 95% of the Gen AI LLMs being used today are being used in the cloud. The time is now for the hyperscalers to announce how they will win the race to Generative AI.
2. Amazon’s Commitment to Generative AI:
Amazon CEO, Andy Jassy, during the third quarter earnings call, said he foresees “a very substantial, gigantic new generative AI opportunity,” saying the field will generate “tens of billions of dollars in revenue for AWS over the next several years.” The introduction of the Bedrock generative AI marketplace and the initiation of pilot programs by enterprises underscore AWS’ commitment to Gen AI. Enterprises are actively seeking scalable use cases that provide value, and Generative AI often seems to be the way they are trying to do that. AWS wants more than their fair share of the Gen AI growth.
3. Amazon’s Three-Tiered Approach:
Companies are still navigating the landscape, looking for scalable business cases for Gen AI, and determining which models best suit their needs. AWS wants to create an “easy button” for Gen AI in the cloud. Jassy outlined a three-tiered approach to generative AI implementation. The foundation lies in the compute infrastructure to train large language models (LLMs) and produce inferences. The Bedrock marketplace serves as the middle layer, offering customization of various LLMs. The top layer consists of applications like Amazon CodeWhisperer, which are part of a growing generative AI ecosystem. This structured approach is designed to simplify access to emerging capabilities, emphasizing the importance of bringing models to data. Since AWS has a disproportionate share of customers’ data, moving models to the data is an advantage for AWS. We expect announcements across all three of Jassy’s Gen AI layers.
4. Microsoft’s AI Growth:
AWS is feeling some significant pressure from its competitors. Microsoft’s recent quarterly conference call revealed that AI contributed 3 points of the 29% growth in its Azure cloud revenue exceeding the 2% contribution from AI that the company had predicted going into the quarter. In other words, not only is AI in the cloud growing, it’s growing faster than expected. This growth, coupled with the fact that AI projects lead to increased consumption of other Azure services, reinforces the rising importance of AI in the cloud sector. Some think Microsoft may be taking the lead in AI in the cloud. Analysts at Bernstein said Microsoft has “has taken the AI [mantle] from Google, and that Azure could become a bigger and more important hyperscale provider than AWS.”
5. Google’s Stake in AI:
Google CEO, Sundar Pichai, mentioned that over half of all funded generative AI startups are Google Cloud customers. With offerings like Nvidia GPUs and the Vertex AI platform, Google is also a significant player in the AI arena. Google has several advantages in AI – an early start with the Deep Mind acquisition (2014), thought leadership with the publication of an approach that paved the way for today’s Generative AI – their transformer white paper (2017), and Google’s own heavily AI-dependent ad business. Alphabet’s third quarter results had the company beating estimates on revenue and EPS but the stock sank with a poor showing by the company’s cloud business. AI in general, and Generative AI in particular, will be the lever Google uses to get back its cloud mojo.
In conclusion, Generative AI is shaping up to be a titanic battle among the cloud titans. Leadership of the cloud market is at stake and Generative AI is the bright and shiny object of the day. We expect that the majority of significant announcements at Re:Invent 2023 will be around Generative AI and how AWS intends to keep its #1 position in cloud by leading in Gen AI.