• Andrej Karpathy recently suggested AI could enhance e-book reading with interactive features.
• Amazon may already be thinking about this for its Kindle e-books.
• The company is looking for an applied scientist to improve the reading and publishing experience.

The AI pioneer and OpenAI cofounder Andrej Karpathy thinks AI can significantly improve how people read books. Amazon may already be thinking about how to do this for its Kindle e-books business.

In a series of posts on X this week, Karpathy proposed building an AI application that could read books together with humans, answering questions and generating discussion around the content. He said it would be a "huge hit" if Amazon or some other company built it.

A recent job post by Amazon suggests the tech giant may be doing just that.

Amazon is looking for a senior applied scientist for the "books content experience" team who can leverage "advances in AI to improve the reading experience for Kindle customers," the job post said.

The goal is "unlocking capabilities like analysis, enhancement, curation, moderation, translation, transformation and generation in Books based on Content structure, features, Intent, Synthesis and publisher details," it added.

The role will focus on not just the reading experience but also the broader publishing and distribution space. The Amazon team wants to "streamline the publishing lifecycle, improve digital reading, and empower book publishers through innovative AI tools and solutions to grow their business on Amazon," the job post said.

3 phases

Amazon identified three major phases of the book life cycle and thinks AI could improve each one.

• First up is the publishing part where books are created.
• Second is the reading experience where AI can help build new features and "representation" in books and drive higher reading "engagement."
• The third stage is "reporting" to help improve "sales & business growth," the job post said.

An Amazon spokesperson didn't immediately respond to a request for comment on Friday.

'I love this idea'

There seems to be huge demand for this type of service, based on the response to Karpathy's X post.

Stripe CEO Patrick Collison wrote under the post that it's "annoying" to have to build this AI feature on his own, adding that it would be "awesome when it's super streamlined."

Reddit's cofounder Alexis Ohanian wrote, "I love this idea."

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• Evercore says Amazon Pharmacy's revenue may hit $2 billion this year.
• Interest in Amazon's online pharmacy service rose to 45% in Evercore's survey from 34% last year.
• The US prescription market is worth about $435 billion.

Amazon's online pharmacy business is drawing significantly more customer interest, and it could generate roughly $2 billion in revenue this year, according to the financial firm Evercore.

In a note published last week, the Evercore analyst Mark Mahaney highlighted his firm's recent survey indicating rising interest in and usage of Amazon Pharmacy.

A record 45% of Amazon customers surveyed said they were "extremely interested" or "very interested" in buying online medications from the company, up from 34% last year and from 14% in 2020. The note said it was the largest year-over-year increase in purchase intent for pharmaceuticals among Amazon shoppers in eight years. Evercore ran the survey in June and included 1,100 respondents.

The survey also found that 13% of Amazon customers said they had purchased pharma products from Amazon, compared with 9% last year.

Evercore estimated, based on "several sources," that all this could result in roughly $2 billion in revenue for Amazon's pharmacy business. Business Insider previously reported that Amazon's internal forecast showed its pharmacy business generating $1.8 billion in sales after recording $1.25 billion last year.

Amazon's growth is squeezing retail pharmacy businesses too. On Tuesday, The Wall Street Journal reported that Walgreens was in talks to sell itself to a private-equity firm.

Evercore believes half of Prime membership households will eventually shop for online medications on Amazon, which could result in $33 billion in additional revenue and $1.6 billion in operating income over the next three to five years.

"This inflection in consumer intent to purchase prescriptions online, and on Amazon, may well be a sign of Amazon closing in on a potential Rx market unlock," Mahaney wrote in the note.

Mahaney also wrote that Amazon was aggressively expanding its same-day-delivery service for pharmaceutical products, noting a recent announcement that said it would cover nearly half of US consumers by the end of 2025. He also highlighted the sheer size of the US prescription market, about $435 billion, of which Amazon Pharmacy has penetrated less than 1%.

Amazon's spokesperson declined to comment.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• Bank of America downgraded AMD on Monday, citing higher competitive risk in the AI market.
• AWS customers' low demand for AMD AI chips and Nvidia dominance impact AMD's growth potential.
• AMD could still succeed due to Nvidia supply issues and its server chip market position.

Bank of America downgraded AMD after a Business Insider report raised concerns about demand for the tech company's AI chips.

Analysts at BofA cut AMD shares to a "neutral," citing "higher competitive risk" in the AI market, according to an analyst note published on Monday.

BofA analysts also lowered their AMD GPU sales forecast for next year to $8 billion, from $8.9 billion, implying a roughly 4% market share.

AMD's stock dropped roughly 5.6% on Monday, after falling about 2% on Friday. Its shares are down about 5% so far this year.

The declines follow BI's report on Friday that said Amazon Web Services was "not yet" seeing strong enough customer demand to deploy AMD's AI chips through its cloud platform.

Bank of America cited this AWS customer-demand issue, alongside Nvidia's dominance and the growing preference for custom chips from Marvell and Broadcom, as factors limiting AMD's growth potential.

"Recently largest cloud customer Amazon strongly indicated its preference for alternative custom (Trainium/ MRVL) and NVDA products, but a lack of strong demand for AMD," the Bank of America note said, referring to AWS's in-house AI chip Trainium and its close partnerships with Marvell and Nvidia.

AWS's spokesperson said in an email to BI, "AWS and AMD work together closely, as we continue to make AWS the best place to run AMD silicon. Based on the success of AMD CPUs on AWS, we are actively looking at offering AMD's AI chips."

An AMD spokesperson didn't respond to a request for comment on Monday.

AMD recently increased its GPU sales forecast, just a year after launching its line of AI chips. But its GPU market share is still far behind Nvidia's.

Bank of America said AMD could still succeed in the AI chip market, in part due to Nvidia's supply constraints and premium pricing, making it a strong alternative, especially for internal cloud workloads. It also said AMD is well positioned in the server chip market, as rival Intel continues to struggle.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• AWS has not committed to offering cloud access to AMD's AI chips in part due to low customer demand.
• AWS said it was considering offering AMD's new AI chips last year.
• AMD recently increased the sales forecast for its AI chips.

Last year, Amazon Web Service said it was considering offering cloud access to AMD's latest AI chips.

18 months in, the cloud giant still hasn't made any public commitment to AMD's MI300 series.

One reason: low demand.

AWS is not seeing the type of huge customer demand that would lead to selling AMD's AI chips via its cloud service, according to Gadi Hutt, senior director for customer and product engineering at Amazon's chip unit, Annapurna Labs.

"We follow customer demand. If customers have strong indications that those are needed, then there's no reason not to deploy," Hutt told Business Insider at AWS's re:Invent conference this week.

AWS is "not yet" seeing that high demand for AMD's AI chips, he added.

AMD shares dropped roughly 2% after this story first ran.

AMD's line of AI chips has grown since its launch last year. The company recently increased its GPU sales forecast, citing robust demand. However, the chip company still is a long way behind market leader Nvidia.

AWS provides cloud access to other AI chips, such as Nvidia's GPUs. At re:Invent, AWS announced the launch of P6 servers, which come with Nvidia's latest Blackwell GPUs.

AWS and AMD are still close partners, according to Hutt. AWS offers cloud access to AMD's CPU server chips, and AMD's AI chip product line is "always under consideration," he added.

Hutt discussed other topics during the interview, including AWS's relationship with Nvidia, Anthropic, and Intel.

An AMD spokesperson declined to comment.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

Editor's note: This story was first published on December 6, 2024, and was updated later that day to reflect developments in AMD's stock price.

• AWS launched new AI chips that compete with Nvidia's GPUs.
• AWS says its goal is to provide more customer choice, not to dethrone Nvidia in the AI chip market.
• Gadi Hutt, a senior director at AWS, also talked about partnerships with Intel, Anthropic, and AMD.

Amazon Web Services launched an upgraded line of AI chips this week, putting the company squarely in competition with Nvidia.

Except AWS doesn't see it that way.

AWS's new AI chips aren't meant to go after Nvidia's lunch, said Gadi Hutt, a senior director of customer and product engineering at the company's chip-designing subsidiary, Annapurna Labs. The goal is to give customers a lower-cost option, as the market is big enough for multiple vendors, Hutt told Business Insider in an interview at AWS's re:Invent conference.

"It's not about unseating Nvidia," Hutt said, adding, "It's really about giving customers choices."

AWS has spent tens of billions of dollars on generative AI. This week the company unveiled its most advanced AI chip, called Trainium 2, which can cost roughly 40% less than Nvidia's GPUs, and a new supercomputer cluster using the chips, called Project Rainier. Earlier versions of AWS's AI chips had mixed results.

Hutt insists this isn't a competition but a joint effort to grow the overall size of the market. The customer profiles and AI workloads they target are also different. He added that Nvidia's GPUs would remain dominant for the foreseeable future.

In the interview, Hutt discussed AWS's partnership with Anthropic, which is set to be Project Rainer's first customer. The two companies have worked closely over the past year, and Amazon recently invested an additional $4 billion in the AI startup.

He also shared his thoughts on AWS's partnership with Intel, whose CEO, Pat Gelsinger, just retired. He said AWS would continue to work with the struggling chip giant because customer demand for Intel's server chips remained high.

Last year AWS said it was considering selling AMD's new AI chips. But Hutt said those chips still weren't available on AWS because customers hadn't shown strong demand.

This Q&A has been edited for clarity and length.

There have been a lot of headlines saying Amazon is out to get Nvidia with its new AI chips. Can you talk about that?

I usually look at these headlines, and I giggle a bit because, really, it's not about unseating Nvidia. Nvidia is a very important partner for us. It's really about giving customers choices.

We have a lot of work ahead of us to ensure that we continuously give more customers the ability to use these chips. And Nvidia is not going anywhere. They have a good solution and a solid road map. We just announced the P6 instances [AWS servers with Nvidia's latest Blackwell GPUs], so there's a continuous investment in the Nvidia product line as well. It's really to give customers options. Nothing more.

Nvidia is a great supplier of AWS, and our customers love Nvidia. I would not discount Nvidia in any way, shape, or form.

So you want to see Nvidia's use case increase on AWS?

If customers believe that's the way they need to go, then they'll do it. Of course, if it's good for customers, it's good for us.

The market is very big, so there's room for multiple vendors here. We're not forcing anybody to use those chips, but we're working very hard to ensure that our major tenets, which are high performance and lower cost, will materialize to benefit our customers.

Does it mean AWS is OK being in second place?

It's not a competition. There's no machine-learning award ceremony every year.

In the case of a customer like Anthropic, there's very clear scientific evidence that larger compute infrastructure allows you to build larger models with more data. And if you do that, you get higher accuracy and more performance.

Our ability to scale capacity to hundreds of thousands of Trainium 2 chips gives them the opportunity to innovate on something they couldn't have done before. They get a 5x boost in productivity.

Is being No. 1 important?

The market is big enough. No. 2 is a very good position to be in.

I'm not saying I'm No. 2 or No. 1, by the way. But it's really not something I'm even thinking about. We're so early in our journey here in machine learning in general, the industry in general, and also on the chips specifically, we're just heads down serving customers like Anthropic, Apple, and all the others.

We're not even doing competitive analysis with Nvidia. I'm not running benchmarks against Nvidia. I don't need to.

For example, there's MLPerf, an industry performance benchmark. Companies that participate in MLPerf have performance engineers working just to improve MLPerf numbers.

That's completely a distraction for us. We're not participating in that because we don't want to waste time on a benchmark that isn't customer-focused.

On the surface, it seems like helping companies grow on AWS isn't always beneficial for AWS's own products because you're competing with them.

We are the same company that is the best place Netflix is running on, and we also have Prime Video. It's part of our culture.

I will say that there are a lot of customers that are still on GPUs. A lot of customers love GPUs, and they have no intention to move to Trainium anytime soon. And that's fine, because, again, we're giving them the options and they decide what they want to do.

Do you see these AI tools becoming more commoditized in the future?

I really hope so.

When we started this in 2016, the problem was that there was no operating system for machine learning. So we really had to invent all the tools that go around these chips to make them work for our customers as seamlessly as possible.

If machine learning becomes commoditized on the software and hardware sides, it's a good thing for everybody. It means that it's easier to use those solutions. But running machine learning meaningfully is still an art.

What are some of the different types of workloads customers might want to run on GPUs versus Trainium?

GPUs are more of a general-purpose processor of machine learning. All the researchers and data scientists in the world know how to use Nvidia pretty well. If you invent something new, if you do that on GPU, then things will work.

If you invent something new on specialized chips, you'll have to either ensure compiler technology understands what you just built or create your own compute kernel for that workload. We're focused mainly on use cases where our customers tell us, "Hey, this is what we need." Usually the customers we get are the ones that are seeing increased costs as an issue and are trying to look for alternatives.

So the most advanced workloads are usually reserved for Nvidia chips?

Usually. If data-science folks need to continuously run experiments, they'll probably do that on a GPU cluster. When they know what they want to do, that's where they have more options. That's where Trainium really shines, because it gives high performance at a lower cost.

AWS CEO Matt Garman previously said the vast majority of workloads will continue to be on Nvidia.

It makes sense. We give value to customers who have a large spend and are trying to see how they can control the costs a bit better. When Matt says the majority of the workloads, it means medical imaging, speech recognition, weather forecasting, and all sorts of workloads that we're not really focused on right now because we have large customers who ask us to do bigger things. So that statement is 100% correct.

In a nutshell, we want to continue to be the best place for GPUs and, of course, Trainium when customers need it.

What has Anthropic done to help AWS in the AI space?

They have very strong opinions of what they need, and they come back to us and say, "Hey, can we add feature A to your future chip?" It's a dialogue. Some ideas they came up with weren't feasible to even implement in a piece of silicon. We actually implemented some ideas, and for others we came back with a better solution.

Because they're such experts in building foundation models, this really helps us home in on building chips that are really good at what they do.

We just announced Project Rainier together. This is someone who wants to use a lot of those chips as fast as possible. It's not an idea — we're actually building it.

Can you talk about Intel? AWS's Graviton chips are replacing a lot of Intel chips at AWS data centers.

I'll correct you here. Graviton is not replacing x86. It's not like we're yanking out x86 and putting Graviton in place. But again, following customer demand, more than 50% of our recent landings on CPUs were Graviton.

It means that the customer demand for Graviton is growing. But we're still selling a lot of x86 cores too for our customers, and we think we're the best place to do that. We're not competing with these companies, but we're treating them as good suppliers, and we have a lot of business to do together.

How important is Intel going forward?

They will for sure continue to be a great partner for AWS. There are a lot of use cases that run really well on Intel cores. We're still deploying them. There's no intention to stop. It's really following customer demand.

Is AWS still considering selling AMD's AI chips?

AMD is a great partner for AWS. We sell a lot of AMD CPUs to customers as instances.

The machine-learning product line is always under consideration. If customers strongly indicate that they need it, then there's no reason not to deploy it.

And you're not seeing that yet for AMD's AI chips?

Not yet.

How supportive are Amazon CEO Andy Jassy and Garman of the AI chip business?

They're very supportive. We meet them on a regular basis. There's a lot of focus across leadership in the company to make sure that the customers who need ML solutions get them.

There's also a lot of collaboration within the company with science and service teams that are building solutions on those chips. Other teams within Amazon, like Rufus, the AI assistant available to all Amazon customers, run entirely on Inferentia and Trainium chips.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• Amazon is emphasizing customer choice over market dominance with its AI strategy.
• Amazon unveiled a new series of AI models called Nova this week.
• Amazon's Bedrock tool supports diverse models from multiple providers, unlike OpenAI.

Amazon believes AI models are not in a winner-take-all market.

The company drilled down on this message during this week's re:Invent, the annual extravaganza for its Amazon Web Services cloud unit. Even after unveiling a new series of homegrown AI models called Nova, which, by some measures, are as powerful as other market leaders, Amazon stressed the goal is to provide more choice to customers.

AI models have become the new battleground for tech supremacy since OpenAI released its popular ChatGPT service in late 2022. Companies have rushed to up the ante, trying to outperform each other in model performance.

Amazon has largely been absent from this race. Instead, it has tried to stay neutral, arguing that the generative AI market is so big and varied that customers will want more model choices that fit their different needs. Amazon still believes this is the right approach.

"There are some that would want you to believe there's just this one magic model that could do everything — we never believed in it," Vasi Philomin, AWS's VP of generative AI, told Business Insider. "There'll be many, many winners and there are really wonderful companies out there building some amazing models."

Different positioning

As part of this, Amazon has used Bedrock, an AI development tool that gives access to many models, as its main horse in the AI race. This approach differed from OpenAI, and Meta, which mostly focused on building powerful models or chatbots. Google has a leading AI model in Gemini, but also provides access to other models through its Vertex cloud service, and Microsoft has a similar offering.

This week, Amazon further leaned into its strategy, announcing an array of new updates for Bedrock, including a marketplace for more than 100 specialized models and a distillation feature that fine-tunes smaller, more cost-effective models. It also unveiled new reasoning and "multi-agent" collaboration features that help build better models.

Swami Sivasubramanian, AWS's VP of AI and data, told BI that AWS "pioneered" the model-choice approach and intends to continue to promote it as a "core construct" of the business.

"GenAI is a lot bigger than a single chatbot or a single model to reach its full potential," Sivasubramanian said.

More companies appear to be taking the multi-model approach. According to a recent report by Menlo Ventures, companies typically use 3 or more foundation models in their AI services, "routing to different models depending on the use case or results."

As a result, Anthropic, which Menlo Ventures has backed, doubled its share in the AI model market to 24% this year, while OpenAI's share dropped from 50% to 34% year-over-year, according to the report.

'Choice matters'

Amazon may have no choice but to stick to this narrative. When OpenAI captivated the world with ChatGPT a couple of years ago, Amazon was caught flat-footed, leading to an internal scramble to find answers, BI previously reported. Its first in-house model, called Titan, drew little attention.

Having its own advanced, powerful AI models could help Amazon. It might attract the largest AI developers and promote AWS as the leader in the AI space. It would potentially also encourage those developers to continue building within AWS's broader cloud ecosystem.

Amazon isn't giving up on building its own advanced models. Last year, it created a new artificial general intelligence team under the mandate to build the "most ambitious" large language models. On Tuesday, Amazon unveiled the early results of that effort with its Nova series, which includes a multimodal model capable of handling text, image, and video queries.

Still, Amazon's CEO Andy Jassy downplayed any notion of Nova going after competitors. He said he's been surprised by the diversity of models developers use and that Nova is just one of the many options they will have.

"There is never going to be one tool to rule the world," Jassy said during a keynote presentation this week.

It's hard to know how successful this approach is as Amazon doesn't break out its AI revenue. But Jassy was even more bullish on the AI opportunity during October's call with analysts. He said AWS was now on pace to generate "multi-billion dollars" in AI-related revenue this year, growing at "triple-digit percentages year over year." Amazon's AI business is "growing three times faster at its stage of evolution than AWS did itself," he added.

Rahul Parthak, VP of data and AI, go-to-market, at AWS told BI that Nova's launch was partly driven by customer demand. Customers have been asking for Amazon's own model because some prefer to deal with one vendor that can handle every aspect of the development process, he said.

Amazon still wants other models to thrive because its goal isn't about beating competitors but offering customers "the best options," Parthak added. He said more companies, like Microsoft and Google, are following suit, offering more model choices via their own cloud services.

"We've been pretty thoughtful and clear about what we think customers need, and I think that's playing out," Parthak said.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• AWS recently laid out growth plans for 2025 in internal documents.
• One of the initiatives is focused on working more with consulting firms.
• Accenture was among several consulting firms mentioned by AWS.

Amazon Web Services wants to work more with consulting firms, including Accenture, part of a broader plan to spur growth in 2025, according to an internal planning document obtained by Business Insider.

AWS is looking to expand work with external partners that can sell its cloud services to hundreds of their existing customers. AWS sees an untapped market worth $250 billion and thousands of contracts up for renewal, the document explained.

Beyond Accenture, AWS mentioned Tata Consultancy, DXC Technology, and Atos as partners in the planning document.

AWS will prioritize these partners' existing customers and proactively reach out to them before contract-renewal time, and help the partners become "cloud-first," the document explained.

AWS pioneered cloud computing and still leads this huge and growing market. Over the years, the company has done a lot of work with customers through in-house cloud advisers. So the plan to expand its relationships with outside consulting firms is notable.

Ruba Borno is the VP leading the initiative, which will "review and prioritize partner's incumbent customers based on workloads and relationship," the document also stated.

Borno is a Cisco veteran who joined AWS a few years go to run its global channels and alliances operation, which works with more than 100,000 partners, including consulting firms and systems integrators and software vendors.

These plans are part of new AWS growth initiatives that include a focus on healthcare, business applications, generative AI, and the Middle East region, BI reported last week.

These are part of the AWS sales team's priorities for next year and Amazon refers to them internally as "AGIs," short for "AWS growth initiatives," one of the internal documents shows.

A spokesman for Tata Consultancy declined to comment. Spokespeople at Accenture did not respond to a request for comment.

• Amazon has faced repeated delays in launching a new AI-powered Alexa.
• Integration with partners like Uber and Ticketmaster has complicated troubleshooting processes.
• Latency and compatibility issues have also caused delays.

Amazon's Alexa seems like the perfect product for the generative AI era.

Getting this powerful technology to actually work well with the digital assistant is a monumental challenge that's been plagued by gnarly technical problems and repeated delays.

Customer-friction concerns, partnership hiccups, compatibility questions, latency problems, and accuracy issues have snarled progress, according to internal Amazon documents and multiple people involved in the project.

The Alexa team is under immense pressure to get something out. A decade ago it launched with Echo speakers and became a household name. But that early success fizzled and the business has so far failed to become profitable, leading to drastic cutbacks and layoffs in recent years.

Some company insiders consider this AI moment to be a seismic opportunity for Alexa, and potentially the last chance to reignite consumer interest in the voice assistant through the power of large language models.

A product of this scale is "unprecedented, and takes time," an Amazon spokesperson told Business Insider. "It's not as simple as overlaying an LLM onto the Alexa service."

"RED" warning

One of the main challenges facing the new Alexa relates to how the digital assistant will interact with other companies and services, and who is responsible for customers if their requests, orders, and payments don't go smoothly.

In late August, Amazon was working on integrating 8 third-party applications, including Uber and Ticketmaster, into the upcoming AI-powered Alexa to handle various user inquiries.

At that time, the goal was to launch the new Alexa around mid-October, according to one of the internal documents obtained by Business Insider. However, it was still unclear which companies would be responsible for customer support issues, like payment and delivery errors, this document stated.

The lack of clarity could cause Amazon to send "frequent" customer contacts to the partner companies. Then, those partners would sometimes redirect the users back to Amazon, the document explained.

"This level of support would cause significant customer friction, when some of the orders/purchases are time-sensitive (meal orders or rideshare trips) and purchase mistakes can be expensive (e.g. buy Taylor Swift tickets)," the document said, assigning it a "RED" warning.

Release dates pushed back

Snafus like this have caused Amazon to push back the release date, almost on a weekly basis, according to some of the people involved in the project, which has been codenamed "Banyan" or "Remarkable Alexa." BI's sources asked not to be identified because they're not authorized to talk to the press.

For example, without more clearly defined responsibilities with third-party partners, Amazon expected further delays in the launch. "Alignment on customer support plans between Product teams and the 3P partners may push this timeline further out if any delays occur," one of the documents warned.

The company had once planned for a June launch, but after repeated delays, it told employees late last month that the new Alexa would launch "no earlier" than November 20, one of the documents said.

A few of people BI spoke with recently are even talking about the Alexa upgrade rolling out in early 2025, which would miss the key holiday period. Bloomberg earlier reported on a 2025 launch plan.

As of late October, Amazon had not settled on an official brand for the updated voice assistant, and instructed employees to simply call it the "new Alexa" until further notice, one of the documents said.

Alexa's huge potential

To be sure, Alexa has significant long-term potential in the generative AI era — as long as Amazon can iron out problems relatively quickly.

Time is of the essence, partly because the existing Alexa business has lost momentum in recent years. According to a recent report from eMarketer, user growth for major voice assistants, including Alexa, has declined significantly in recent years.

The sudden rise of ChatGPT has showcased what is possible when powerful AI models are integrated smoothly with popular products that consumers and companies find useful.

Some Amazon leaders are bullish about the AI-powered Alexa and a new paid subscription service that could come with it. At least one internal estimate projected a 20% conversion rate for the paid subscription, one of the people said. That would mean that out of every 100 existing Alexa users, roughy 20 would pay for the upgraded offering. Amazon doesn't publicly disclose the number of active Alexa users but has said it has sold more than 500 million Alexa-enabled devices.

An internal description of the new Alexa shows Amazon's grand ambitions: "A personalized digital assistant that can handle a wide range of tasks, including drafting and managing personal communications, managing calendars, making reservations, placing orders, shopping, scouting for deals and events, recommending media, managing smart home devices, and answering questions on virtually any topic," one of the documents said.

Customers will be able to access the new Alexa "through natural language using voice, text, email, shared photos, and more across all their devices like Echo, Fire TV, mobile phones, and web browsers," it added.

Amazon CEO Andy Jassy shared a similar vision during last month's earnings call, saying the new Alexa will be good at not just answering questions, but also "taking actions."

In an email to BI, Amazon's spokesperson said the company's vision for Alexa is to build the world's "best personal assistant."

"Generative AI offers a huge opportunity to make Alexa even better for our customers, and we are working hard to enable even more proactive and capable assistance on the over half a billion Alexa-enabled devices already in homes around the world. We are excited about what we're building and look forward to delivering it for our customers," the spokesperson said.

Smaller AI models

Still, the project has grappled with several challenges, beyond customer friction and partnership problems.

Latency has been a particularly tough problem for the AI Alexa service. In some tests, the new Alexa took about 40 seconds to respond to a simple user inquiry, according to three people familiar with the test results. In contrast, a Google Search query takes milliseconds to respond.

To speed up, Amazon considered using a smaller AI model, like Anthropic's Claude Haiku, to power the new Alexa, one of the people said. But that dropped the quality and accuracy of the answers, leaving Amazon in limbo, this person said. In general, smaller language models generate quicker responses than larger models but can be less accurate.

Amazon had initially hoped to use a homegrown AI model, one of the people said. Last year, Alexa head scientist Rohit Prasad left the team to create a new Artificial General Intelligence group at Amazon. The stated goal of the new team was to create Amazon's "most expansive" and "most ambitious" large language models.

However, this AGI team has not produced notable results so far, which led Amazon to consider Anthropic's main Claude offering as the primary AI model for the new Alexa, this person said. Reuters previously reported that Amazon was going to mainly power Alexa with Claude.

Amazon's spokesperson said Alexa uses Amazon Web Services's Bedrock, an AI tool that gives access to multiple language models.

"When it comes to machine learning models, we start with those built by Amazon, but we have used, and will continue to use, a variety of different models — including Titan and future Amazon models, as well as those from partners — to build the best experience for customers," the spokesperson said.

The spokesperson also added a note of caution by highlighting the difficulties of successfully integrating large language models with consumer applications. These models are great for conversational dialogue and content creation, but they can also be "non-deterministic and can hallucinate," the spokesperson added.

Getting these models "to reliably act on requests (rather than simply respond) means it has to be able to call real-world APIs reliably and at scale to meet customer expectations, not just in select instances," the spokesperson explained.

New risks

In late August, Amazon discovered several new risk factors for the AI Alexa service.

Only 308 of more than 100,000 existing Alexa "skills," or voice-controlled applications, were compatible with the new Alexa, presenting a "high risk for customers to be frustrated," one of the documents explained.

Some older Echo devices would not be able to support the AI-powered Alexa, the document also warned. And there were no plans for expanding the new service to dozens of overseas markets where Alexa is currently available, leaving a large user base out of touch, it also noted. Fortune previously reported some of these risk factors.

Integration headaches

As of late August, Amazon had 8 "confirmed" partner companies to handle certain tasks for the new Alexa, as BI previously reported. The company hopes to onboard roughly 200 partners by the third year of the new Alexa's launch, one of the documents said.

Integrating with some of these companies has already created headaches. One document said that Amazon struggled to develop a consistent troubleshooting process across every partner service. Companies including Uber, Ticketmaster, and OpenTable have deprecated their existing Alexa skills, further disconnecting them from the voice assistant.

Amazon's spokesperson said that, as with any product development process, a lot of ideas are discussed and debated, but "they don't necessarily reflect what the experience will be when we roll it out for our customers."

Amazon has also anticipated customer complaints, at least in the early launch phase. One internal document from late August stated that the new Alexa was projected to receive 176,000 customer contacts in the first three months of its release. At one point, Amazon considered launching a new automated troubleshooting service for issues related to its devices and digital services, including Alexa, according to one of the internal documents. That was later shelved.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• AWS faces competition from OpenAI, Microsoft, and Google in AI, risking its cloud dominance.
• It offers new financial incentives for AI sales. That comes with higher pressure and new demands.
• AWS CEO Matt Garman wants his teams to move even faster.

This summer, Amazon Web Services rolled out a new internal campaign.

The initiative, called "Find One, Launch One, Ramp One," introduced goals, prizes, and other incentives for Amazon's huge cloud-support teams across North America.

The ultimate aim was to sell more of the company's new AI offerings. Sales architects, customer-success managers, and people in other roles were recruited into the broad push.

"This is a great time to partner with our sales teams for this #OneTeam effort," AWS said in an internal memo obtained by Business Insider.

These AWS staffers were asked to find at least one sales opportunity each month for Q, Amazon's artificial-intelligence assistant, and Bedrock, the company's AI platform.

Then, the initiative asked employees to launch one Bedrock or Q customer workload.

The final requirement, the "Ramp One" part, pushed teams to generate real revenue from these workloads.

AWS created a leaderboard for everyone to see the top performers. With December 1 as the deadline, the company dangled prizes, including an evening of pizza and wine at an executive's home (with guitar playing as a possibility).

A race for AI supremacy

This initiative is just one example of AWS trying to squeeze more out of its massive sales and support teams to be more competitive in AI. There's more pressure and urgency to sell AI products, along with new incentives, according to several internal documents and more than a dozen current and former AWS employees.

Messaging from AWS CEO Matt Garman, previously the cloud unit's top sales executive, is to move even faster, these people said. They asked not to be identified because they're not authorized to speak with the press. Their identities are known to BI.

Much is at stake for Amazon. OpenAI, Microsoft, and Google, alongside a slew of smaller startups, are all vying for AI supremacy. Though Amazon is a cloud pioneer and has worked on AI for years, it is now at risk of ceding a chance to become the main platform where developers build AI products and tools.

More pressure

The revamped sales push is part of the company's response to these challenges. As the leading cloud provider, AWS has thousands of valuable customer relationships that it can leverage to get its new AI offerings out into the world.

Many AWS sales teams have new performance targets tied to AI products.

One team has to hit a specific number of customer engagements that focus on AWS's generative-AI products, for instance.

There are also new sales targets for revenue driven by gen-AI products, along with AI-customer win rates and a goal based on the number of gen-AI demos run, according to one of the internal Amazon documents.

Another AWS team tracks the number of AI-related certifications achieved by employees and how many other contributions staff have made to AI projects, one of the people said.

Hitting these goals is important for Amazon employees because that can result in higher performance ratings, a key factor in getting a raise or promotion.

More employees encouraged to sell AI

Even people in roles that traditionally don't involve actively selling products are feeling pressure to find opportunities for AI sales, according to Amazon employees who spoke with BI and internal documents.

AWS software consultants, who mostly work on implementing cloud services, are now encouraged to find sales opportunities, which blurs the line between consultants and traditional salespeople.

The Find One, Launch One, Ramp One initiative includes AWS sales architects. These staffers traditionally work with salespeople to craft the right cloud service for each customer. Now they're incentivized to get more involved in actual selling and are measured by the results of these efforts.

"Customers are interested in learning how to use GenAI capabilities to innovate, scale, and transform their businesses, and we are responding to this need by ensuring our teams are equipped to speak with customers about how to succeed with our entire set of GenAI solutions," an AWS spokesperson told BI.

"There is nothing new or abnormal about setting sales goals," the spokesperson added in a statement. They also said that AWS sales architects were not "sellers" and that their job was to "help customers design solutions to meet their business goals."

There are "no blurred lines," the spokesperson said, and roles and expectations are clear.

Selling versus reducing customer costs

One particular concern among some AWS salespeople revolves around the company's history of saving cloud customers money.

Some staffers told BI that they now feel the company is force-feeding customers AI products to buy, even if they don't need them. The people said this represented a shift in AWS's sales culture, which over the years has mostly looked for opportunities to reduce customers' IT costs.

In some cases, salespeople have also been asked to boost the attendance of external AWS events. Several recent AWS-hosted AI events saw low attendance records, and salespeople were told to find ways to increase the number of registrations by reaching out to customers, some of the people said.

AWS's spokesperson said customer attendance had "exceeded our expectations for a lot of our AI events" and that the number of participants at the re:Invent annual conference "more than doubled."

The spokesperson also said the notion that Amazon had moved away from its goal of saving customers money was false. The company always starts with "the outcomes our customers are trying to achieve and works backwards from there."

A hammer and a nail

Garman, Amazon's cloud boss, hinted at some of these issues during an internal fireside chat in June, according to a recording obtained by BI. He said there were sales opportunities for AWS in "every single conversation" with a customer but that AWS must ensure those customers get real value out of their spending.

"Too often we go talk to customers to tell them what we've built, which is not the same thing as talking to customers," Garman said. "Just because you have a hammer doesn't mean the problem the customer has is the nail."

AWS's spokesperson said the company is "customer-obsessed" and always tries to consider decisions "from our customers' perspectives, like their ROI." The spokesperson added that some of AWS's competitors don't take that approach and that it's a "notable contrast," pointing to this BI story about a Microsoft customer complaining about AI features.

More pressure but also more rewards

Amazon is also doling out bonuses and other chances for higher pay for AI-sales success.

AWS recently announced that salespeople would receive a $1,000 performance bonus for the first 25 Amazon Q licenses they sell and retain for three consecutive months with a given customer, according to an internal memo seen by BI. The maximum payout is $20,000 per customer.

For Bedrock, Amazon pays salespeople a bonus of $5,000 for small customers and $10,000 for bigger customers when they "achieve 3 consecutive months of specified Bedrock incremental usage in 2024," the memo said.

Some AWS teams are discussing higher pay for AI specialists. Sales architects, for example, in AI-related roles across fields including security and networking could get a higher salary than generalists, one of the people said.

AWS's spokesperson told BI that every major tech company provides similar sales incentives. Amazon continually evaluates compensation against the market, the spokesperson added.

Fear of losing to Microsoft

Inside AWS, there's a general concern that Amazon was caught off guard by the sudden emergence of generative AI and is playing catch-up to its rivals, most notably Microsoft, the people who spoke with BI said.

Some Amazon employees are worried that Q is losing some customers to Microsoft's Copilot because of a lack of certain AI features, BI previously reported.

Microsoft has an advantage because of its wide variety of popular business applications, including its 365 productivity suite. That may make it easier for Microsoft to show customers how AI can improve their productivity, some of the Amazon employees told BI. AWS, meanwhile, has struggled to build a strong application business, despite years of trying.

AWS's spokesperson challenged that idea by noting that AWS has several successful software applications for companies, including Amazon Connect, Bedrock, and SageMaker. The spokesperson also said Amazon Q launched in April and was already seeing robust growth.

It's "no secret that generative AI is an extremely competitive space," the spokesperson added, saying: "However, AWS is the leader in cloud and customer adoption of our AI innovation is fueling much of our continued growth. AWS has more generative AI services than any other cloud provider, which is why our AI services alone have a multibillion-dollar run rate."

More speed

A major AWS reorganization earlier this year hasn't helped the AI-sales effort, some of the people who spoke with BI said.

The big change switched AWS to more of an industry focus rather than a regional one. That caused confusion inside the company, and some large customers lost their point of contact, the people said. AWS is still figuring out how to run as a more cohesive group, which has resulted in a slower sales cycle, they added.

AWS's spokesperson said it's inaccurate to say its sales process has slowed, adding that year-over-year revenue growth accelerated again in the most recent quarter and that the business was on pace to surpass $100 billion in sales this year.

In his June fireside chat, Garman stressed the importance of speed and told employees to "go faster."

"Speed really matters," Garman said. "And it doesn't necessarily mean work more hours. It means: How do we make decisions faster?"

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.

• Internal AWS documents obtained by BI lay out the cloud giant's growth priorities next year.
• The company is focusing on at least 7 areas with codenames such as "ACDC" and "T2K."
• AWS faces competition from Microsoft and Google, though it leads the cloud market.

Amazon Web Services recently laid out new growth initiatives that include a focus on healthcare, business applications, generative AI, and the Middle East region, according to internal documents obtained by Business Insider.

These are part of the AWS sales team's priorities for next year and Amazon refers to them internally as "AGIs," short for "AWS growth initiatives," one of the internal documents shows.

Greg Pearson, AWS's VP of global sales, recently told employees that these AGIs are designed to drive "needle-moving, incremental revenue" and bring an "array of customers, faster than ever," a separate internal email seen by BI showed.

For AWS, the success of these initiatives is consequential. Competition from Microsoft and Google keeps growing and the rise of generative AI has put more pressure on AWS, particularly its sales team, BI previously reported. The company may share more details on these initiatives next week, when it hosts its annual re:Invent conference.

AWS revenue continued to reaccelerate in the most recent quarter, jumping 19% to $27.5 billion. That was slower than Microsoft's and Google's cloud business, on a percentage basis.

Amazon regularly adds more cloud revenue than its rivals, in absolute dollar terms. And the company still accounts for 30% of the global cloud infrastructure market, ahead of Microsoft's 20% and Google's 12% share, according to Synergy Research Group.

"We obsess over our customers and are proud of the many tailored programs we have in place to help them take advantage of the reliability, scale, and innovative services that AWS has to offer," AWS spokesperson Patrick Neighorn wrote in an email to BI.

Here are 7 of the "AGIs" for 2025 that AWS described in the internal document:

Accelerate to the Cloud from Data Centers (ACDC)

Amazon wants to fast-track customers to AWS's cloud-computing services. Ideal customers are companies that run their own data centers, have strong senior-level relationships with AWS, or have experience with AWS or other cloud-computing services, the document explained.

It added that AWS is "uniquely positioned" to win because it has longer experience in the cloud than competitors and can offer potential customers the right structure and incentives.

AWS Top 2000 (T2K)

AWS is targeting the world's largest companies with multiple billions of dollars in revenue, starting with those on the Forbes Global 2000 list, the document stated. It breaks down customers by contract size and growth stage.

These companies have very large, highly complex technical architectures requiring significant investment and time. AWS wants to customize solutions based on each company and industry, and speed up deals by using external consultants and partners, it added.

Business Applications Acceleration

AWS is focused on "winning the largest Business Application providers" in the enterprise resource planning (ERP) and customer relationship management (CRM) markets.

Many companies still use their own data centers to run business applications from providers such as Salesforce, Adobe, and ServiceNow.

Amazon wants to drive growth by getting more of these applications running on AWS's cloud, the document said.

Long-Range Plan: Middle East

The document lists the Middle East market as one of the top business opportunities. In March, for example, AWS announced plans to invest more than $5 billion in Saudi Arabia.

AWS also launched in Bahrain, the UAE, and Israel in 2019, 2022, and 2023, respectively.

IDC estimates the Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, to have a cloud infrastructure market opportunity of $2.8 billion in 2024 and $15.5 billion by 2030.

Generative AI Innovation Center

Last year, AWS launched a $100 million program called Generative AI Innovation Center, which connects customers with AWS's AI scientists and experts to help launch generative AI solutions.

AWS plans to lean on this program to help customers build proofs of concept with generative AI and deploy new products, the document said. AWS's spokesperson told BI that more than 50% of the proof-of-concept solutions developed through this program are now in production.

AWS thinks generative AI is still in its "infancy," where customers are caught between "embracing innovation while also needing to play it safe," the document added. But the potential keeps growing, and its customers understand they need to "act fast," it explained.

IT & Application Outsourcing

AWS plans to expand its work external partners, including Accenture and Tata Consultancy, that can sell AWS services to hundreds of their existing customers, the document explained. AWS sees an untapped market worth $250 billion and thousands of contracts up for renewal, it added.

AWS will prioritize these partners' existing customers and proactively reach out to them before contract-renewal time, and help the partners become "cloud-first," the document said.

Epic Growth Initiative

AWS wants to onboard more customers to Epic System's electronic medical record software, hosted on AWS's cloud infrastructure, the document said. AWS and Epic have been close partners for years.

AWS wants to target hundreds of medical providers that use Epic's own data center services, and work with industry partners to "accelerate proactive moves to Epic on AWS," it added.

Do you work at Amazon? Got a tip?

Contact the reporter, Eugene Kim, via the encrypted-messaging apps Signal or Telegram (+1-650-942-3061) or email ([email protected]). Reach out using a nonwork device. Check out Business Insider's source guide for other tips on sharing information securely.