Amazon (AMZN) – AWS’s Subtle & Savvy Move & Mizuho – April 06, 2024
AWS
Amazon’s AWS is extending its cloud credits to more AI startups to utilize the mega-cap’s deep bench of GenAI model integrations. I know this sounds irrelevant, but it isn’t.
Meta established itself as an open source king of GenAI models. Its LLAMA model series is world-renowned and its open-source aim is understandably popular among 3rd party developers. Model building and many pieces of GenAI will become commodities over time. That process is already beginning to unfold.
Meta open sourcing its GenAI models with deep 3rd party integrations is the perfect way to be that low cost provider. It gives developers free access to models for maintaining, perfecting and building on top of. It allows Meta to enjoy developer work on its models and apps without paying for it on its own. That, in turn, drives cheaper, faster innovation. For Meta specifically, that drives more app engagement and, in turn, more desire for developers to keep building on its platform. That cycle merely churns and churns.
While Amazon’s news here isn’t identical, it does rhyme. Opening up its foundational model, 3rd party model integrations and GenAI companions like CodeWhisperer to more AI-startups will make Amazon a more desirable place to build. That building, like with Meta’s foundational models, will make model and app-level innovation faster and cheaper for Amazon. And that will place it in a better position to carve out a large niche within this current boom. If you want to be the low cost provider… you give world-class developers complete access to your tools with whatever model they want to use and whatever source code language they want to write in. You let them monetize their creations (while taking a cut) and you let them improve your own. This news indicates that Amazon is doing that. Thumbs up from me.
In other AWS news, it will cut a few hundred sales & marketing jobs as well as some physical store tech talent. I wish the affected employees the best.
Mizuho
We may as well make this a weekly segment at this point. Mizuho became the latest firm this week to talk up its increasing bullishness on Amazon as a 2024 top pick. Its AWS customer survey with a “leading channel partner” was robust. It sees cloud optimization headwinds fading away and consumption growth normalizing.
