Smash Notes

Back to Amazon CEO Andy Jassy on the $220 Billion AI Buildout, with Andy Jassy & Ben Horowitz.

How Fast Did Amazon Build Fulfillment?

Andy Jassy says Amazon decided to build out its fulfillment network and last mile transportation network aggressively and quickly in the early part of the pandemic. He says going that fast would be really hard, would probably cost more than going slower, and would probably not get everything as optimally as a slower build. No physical stores were open, customers and sellers needed the capacity, and Amazon decided, as it almost always does, to shade on the side of customers.

Not everything in the plan went perfectly. A lot of the fulfillment team was in the office more than most of the rest of the company, while many people designing, planning, and assessing the network were remote and spread out. Amazon balanced bias for action against relentlessly high standards for cost structure, delivery, and design. Andy Jassy says the company expected some cleanup and did not know exactly how the topography would work out. Some things stayed unoptimized in ways he is not sure the team foresaw. Good metrics and a truth-telling culture put the data and the issues on the table. People stay direct with one another and do not allow anyone to paper over issues.

After the capacity was installed, Amazon re-architected key parts of the network. The work was maybe eight or nine on the team's priority list at the time, then became a much higher priority so the network could combine speed and cost.

Grokipedia·Amazon·Andy Jassy

Transcript

Amazon CEO Andy Jassy on the $220 Billion AI Buildout ·

a16z

More from this episode

  1. How Much Has Amazon Grown Since 2021?Andy Jassy tells Ben Horowitz and Erik Torenberg that compared with 2021, when he took over as CEO, Amazon's overall revenue is about 80 percent higher, AWS…
  2. How Fast Is AWS Growing?Andy Jassy says AWS grew 36.7 percent year over year last quarter, on a $169 billion annual revenue run rate.
  3. Why Is $220 Billion of Amazon CapEx Still Not Enough?Andy Jassy says Amazon expects to spend about $220 billion of CapEx in 2026, and even at that level the company is leaving a meaningful amount of demand on…
  4. Do Golf Courses Use More Water Than Amazon Data Centers?Andy Jassy says golf courses consume 200 times more water than all of Amazon's data centers, and more water in two days than those data centers use in a year.
  5. How Does Amazon Split Memory Between AI and Core Customers?Andy Jassy says Amazon has to split scarce memory between HBM for AI accelerators and DRAM for core, non-AI customers.
  6. Why Did Amazon Buy Annapurna Labs?Andy Jassy says Amazon did not buy Annapurna Labs in 2015 for AI chips.
  7. Why Did Amazon Invest in Anthropic and OpenAI?Andy Jassy says Amazon's investments in Anthropic and OpenAI come down to who the teams are, the technology and the models they have built, some of the…
  8. How Does AI Change How Companies Fix Security Flaws?Andy Jassy says companies will have to rewrite almost all of their code so agents can update pieces of it under real constraints, and so security fixes can…
  9. Why Did Amazon Rebuild Alexa?Andy Jassy says Amazon had to rewire Alexa because generative AI made the old brains too limited to stay relevant.

People

More answers like this

More with Ben Horowitz

More with Erik Torenberg

Related episodes

Plays from this note through the rest of the episode.

Weekly highlights

One letter a week.

The notes worth hearing, with the minute they were said.