AI Will Replace Some Jobs, But Create New Ones Too, Says Amazon CEO Andy Jassy | Exclusive

It's great to be here. Thank you for having me. I've been to the country many times and it's exciting to be here.

We are. So, as you said, we've invested about 40 billion dollars since 2010 in India. And we announced another 35 billion by 2030, and we're upping that by another 13 billion. So, an additional 48 billion total by the year 2030.

I'd say this additional 13 billion will be largely AWS and cloud and AI and just the pace at which AI is growing and the pace at which AI is growing here in India is really remarkable.

Well, I think AI is the most transformative technology of our lifetime which is saying a lot because we've lived through the internet and through mobile and the cloud. But it's going to change every single customer experience that we know and it's going to enable all sorts of new ones that we only imagined before. And I think you can just look at the rate of growth. When we started AWS and I was part of the team that started AWS 20 years ago, the first 3 years of the AWS business we felt like we were growing really fast and the business was a 57 million dollar annual run rate business. If I look at the first 3 years of this wave of AI in AWS it's over 15 billion dollars annual run rate. That's 260 times larger than what we had at the beginning of AWS. So it's growing unbelievably quickly and if you look at the last quarter we grew 28% year over year in AWS and on a very large 150 billion dollar annual revenue run rate. That's very unusual. And so, the way that the cash cycle works in a business like AWS is that you have to lay out the cash for the data centers and for the hardware and for the chips and the networking gear in advance of when you can monetize it. And so, that means that in the early years, when you're investing a lot of capital expense, until your revenue growth starts to outpace your capital expense growth, you'll have headwinds in the free cash flow side. But, once your revenue growth starts to outpace the CapEx growth, which will happen in a couple years, you really like the return on invested capital and the free cash flow. And that's what I think will happen here. We've had an example of that in the first phase of AWS, where you really like the operating income and the free cash flow and the ROIC. It's following the same pattern in AI. And I think because we have this really unusual opportunity where everything's going to be reinvented with AI, if we're able to successfully get customers capacity with the right services at the right service levels, our business 5 to 10 years down the road will be much larger on a revenue side, on the operating income side, and on the free cash flow side.

Well, I think that we will end up generating much larger free cash flow for Amazon and for our shareholders in the next 5 to 10 years. I don't know exactly which year, but typically what happens is you invest a lot of this capital up front, and then you really like the free cash flow returns a couple few years down the road. And I expect the same thing to happen here.

Well, India is an area of very high growth for AWS, and for the company as a whole. On the AWS side, we have hundreds of thousands of customers here in India who use AWS. The rate of growth there both on the AI side and non-AI, which we call core, is very substantial. We have a fair number of GPUs and AI accelerators here for startups and individual developers and researchers and enterprises and government entities to use. So, I think we'll be a very big part of our growth that's a lot of what the incremental $13 billion we're investing in India is about. And then we're continuing to grow so fast on the marketplace side here. And you look at just the growth in quick commerce as an example. So, we have the broadest selection of products that get to people the fastest. So, we can deliver thousands of items to customers in minutes, tens of thousands of items to people in a few hours, over a million items we can deliver same day, over 4 million next day. It's very unusual and what we find with how fast our quick commerce is growing, where it's doubling every quarter, Prime customers who've tried quick commerce are buying three times more frequently than Prime members that don't. And so, we're thrilled with the growth here and we have a lot in front of us in India.

Well, you know, remember we've been experimenting with lots of different delivery models in India and outside of India for many years, including a form of quick commerce several years ago. And what we have to do at our scale and with the number of customers we serve, we have to find delivery models that really work for customers and an economic equation for the company. And so it took us a little bit of time to find the equation we like, but with quick commerce, which we started about a year ago, the rapid pace of adoption is pretty amazing. And if you layer on top of what we have in quick commerce, the broadest selection that's out there at the shortest delivery times that are available. And you layer on top of that prime, which is a very unusual subscription and membership program where customers get free and fast delivery on the broadest selection of items. They get Amazon pay with cash back benefits. They get all the content you get in prime video and in prime music. You layer on top of that the broad selection, the fast delivery, the quick commerce growth, the prime and then the announcement we just made today, which is we're now extending our Amazon now quick commerce offering to over 300 cities here in India. And it's a very powerful equation for customers and that's why it's growing so fast.

Yeah, I think we've done a lot of experimenting before in different fast delivery models. Everything from different quick commerce models to we're continuing to experiment with drones. And we have found an equation that both resonates with customers and is economic for us and so much so that we're expanding it very rapidly.