AWS and the Gen AI Hype Train

Is AWS’ insistence to ride the Gen AI hype train going to be their downfall?

There’s been an awful lot of chatter this week about the AWS Summit in New York. More specifically about the total lack of anything web services (you know the WS in AWS) related at the summit but super sized helping of the Generative AI kool aid being consumed by Amazon Gen AI Services.

I suspect however the fears of AWS’ imminent death due to their general adoption of “Day 2” thinking may be a little premature at best and possibly ill founded.

To be clear, I think AWS will go the way of all utility companies. Because lets be clear, that’s what AWS is, the newest utility company. Also just like all utility companies they won’t end up there without a fight. Generative AI is just one such fight.

Other utility companies only lost their large profit margins once an open market was established for their wares. Before that they were free to dabble in as many questionable ventures as their hearts desired. Recurring revenue with a healthy margin wasn’t going anywhere. 

And that’s where we still are today. We have an oligopoly of cloud infrastructure providers. Their product offerings on things as simple as a virtual machine are difficult to draw price equivalence on. The largest adoptions of cloud infrastructure in recent years haven’t been startups, they have been large slow moving corporate behemoths. And they’re still getting on board. Though Azure is a doing a good job of stealing AWS’s lunch in this space.

Till such time as we have genuine competition in this space AWS can ignore its users, adopt a “day 2” mentality and show ill-judged slides about its Gen AI prowess all it likes. Your experience in using AWS for what you care about may not improve but they’re not about to see a drop in their revenues anytime soon either. After all, you don’t really have another good option do you?