Amazon, AI, and the cloud: A reality check, with Corey Quinn of 'Last Week in AWS'
Feb 8, 2025
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Corey Quinn, chief cloud economist at The Duckbill Group and host of multiple podcasts, dives deep into the cloud computing landscape. He tackles the buzz around Amazon's AI advancements and the financial realities behind managing AWS costs. Quinn contrasts AI hype with steady cloud adoption, and examines competitive dynamics among tech giants. He shares insights on financial strategies for individuals and discusses the balance companies seek in generative AI adoption. It's a witty yet informative take on the current state of cloud technology.
Corey Quinn emphasizes that while there is significant hype around AI, companies should focus on validating its practical applications before large-scale integration.
The podcast highlights the trend toward a multi-cloud strategy as organizations explore different platforms to optimize their AI model deployment and cloud efficiency.
Deep dives
The AI Hype and Cloud Adoption Landscape
The podcast discusses the overwhelming hype surrounding artificial intelligence (AI) and its impact on cloud adoption. Many companies are feeling pressured to integrate AI into their operations, fearing they are lagging behind competitors. However, Corey Quinn points out that AI adoption differs from cloud adoption, as the latter did not come with the same sense of urgency. While there are some promising AI applications, the general sentiment among clients suggests that the excitement may not translate into immediate practical applications or significant changes in business processes.
Amazon's Capital Expenditures and Cloud Growth
There has been a notable race among tech giants to ramp up investments in AI, with Amazon significantly increasing its capital expenditures to over $100 billion for the year. This includes developing new data centers and acquiring advanced chips for AI model training and inference. Despite this surge in spending, Quinn highlights that AWS continues to show steady growth, albeit lower than some market expectations. Clients often see substantial bills due to core services like compute and storage, and while AWS is performing well, some discussions are overshadowed by the AI narrative.
Efficiency vs. Innovation in AI Development
A key takeaway is the distinction between efficiency and innovation in the application of AI. Companies are currently focused on determining the feasibility and applicability of AI within their workflows rather than rushing to optimize costs for large-scale implementation. Quinn emphasizes the importance of validating AI's capabilities in real-world scenarios before investing heavily in its integration. The gradual transition toward realizing the potential of generative AI may be driven by first identifying its practical business benefits.
Commoditization of AI Models and Multi-Cloud Strategy
The podcast also touches on the increasing commoditization of AI models across various cloud platforms, impacting how organizations approach their cloud strategy. Users now have several options for running AI models, leading to a tendency to adopt a multi-cloud approach based on specific application needs. Amazon's introduction of its Nova model aims to offer a cost-effective alternative for AI applications. Companies are becoming adept at comparing and contrasting experiences on different platforms to maximize efficiency and value from their cloud investments.
Our guest this week is Corey Quinn, the chief cloud economist at The Duckbill Group, the host of the AWS Morning Brief and Screaming in the Cloud podcasts, and the curator of Last Week in AWS, a weekly newsletter. Apart from his newsletter and podcasts, Quinn's day job involves helping AWS customers understand and manage their bills. Amid all the AI hype and billions in capex spending, he uses those insights to provide a behind-the-scenes glimpse and a reality check on the state of the cloud market today.