Amazon CEO Andy Jassy used his company’s Q3 earnings call to hammer archrivals Microsoft and Google for their wimpy pace of GenAI innovation, claiming that AWS has rolled out twice as many GenAI and machine learning (ML) features as the other two vendors combined since early 2023.
Jassy offered zero evidence for his harsh claim, which is the latest in a series of unsubstantiated market-leadership boasts that Jassy has deployed during earnings calls — and I’ll get to that in a moment.
But first, let’s take a look at what Jassy said late last month on the Amazon Q3 earnings call during which he reported that AWS revenue rose 19% to $27.5 billion — an excellent performance that should stand on its own and not require any extraneous fluffery of the type that Jassy trotted out.
Near the top of his remarks about AWS’s Q3 results, Jassy said this:
“The AWS team continues to make rapid progress in delivering AI capabilities for customers in building a substantial AI business. In the last 18 months, AWS has released nearly twice as many machine learning and gen AI features as the other leading cloud providers combined.”
That first sentence is fine, and Jassy shortly thereafter offered some concrete proof of AWS’s booming AI growth when he said it has reached “a multibillion-dollar revenue run rate that continues to grow at a triple-digit year-over-year percentage, and is growing more than 3X faster at this stage of its evolution than AWS itself grew — and we felt like AWS grew pretty quickly.”
That’s a great point on surpassing the meteoric growth rate of AWS.
But then he wrote a dubious check that I’m not sure even immensely profitable AWS can cash.
Jassy didn’t cite any source for that claim, he didn’t show any data, and he didn’t offer a slide laying out the numbers for investors to evaluate.
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He simply said that his excellent cloud company has delivered more ML and GenAI innovations than the combined output of two companies that have been cranking out new AI products and services and technologies at a blistering pace for the past two years, let alone the past 18 months.
Where’s the proof for that way-big talk, Andy? I’ll be very happy to showcase it for the world to see — but first you have to back up the fancy talk with some objective and irrefutable proof.
This is not Jassy’s first trip down this bizarre path of spurious claims made in front of investors and customers. In a February analysis headlined “Amazon Shocker: CEO Andy Jassy Denies Microsoft Is a ‘Cloud Provider’,” I explored Jassy’s equally dubious claim that AWS added more incremental quarter-over-quarter revenue than any other cloud provider “as far as we can tell.”
The only problem with that claim — again, delivered with zero evidence or substantiation — is that it is wildly and demonstrably false. As I wrote in that piece, while AWS added a very impressive $1.1 billion in incremental quarter-over-quarter revenue, Microsoft reported $1.9 billion in incremental quarter-over-quarter cloud revenue for the exact same period.
Well, that baffled me particularly since Microsoft had released its quarterly numbers before Amazon did, making Jassy’s line about “as far as we can tell” particularly absurd. So the only conclusion I could draw was that Jassy and Amazon and AWS must — on the face of the evidence — think that Microsoft is not a “cloud provider.” From my Feb. 15 analysis:
Based on a bizarre statement made during Amazon’s Q4 earnings call earlier this month, CEO Andy Jassy either made a very serious math mistake or he’s unaware that crosstown rival Microsoft qualifies as a “cloud provider” — despite the glaring fact that Microsoft’s cloud business is about 40% larger than Amazon’s.
Now, since Jassy has been presiding very successfully over one of the world’s largest, most powerful, and most influential corporations for almost two years, I think we can definitely rule out a math error as the cause of his utterly tone-deaf and misleading earnings-call comment. So that leaves us with no other explanation for his absurd statement other than he wants to believe — and wants everyone else to believe — that Microsoft is not a “cloud provider.”
Final Thought
As business leaders become increasingly dependent on cloud and AI technology to run their companies and create their own futures, they need strategic tech partners in whom they can place unconditional trust. And when tech execs peddle BS, that trust is weakened.
AWS has a terrific track record to stand upon, and by all measures a strong future ahead of it. But Andy Jassy is doing a disservice to his customers and partners and other stakeholders when he dishes out fantasies that ultimately make it more difficult for customers to trust other things that he and his company say.
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