Amazon Doubles Down On India: CEO Andy Jassy Announces $48 Billion Investment | CNBC TV18

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, 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, mobile, and the cloud. But it's going to change every single customer experience that we know and enable all sorts of new ones that we only imagined before. You can just look at the rate of growth. When we started AWS 20 years ago, the first three years we felt like we were growing really fast, and the business was a 57 million dollar annual run rate. If I look at the first three years of this wave of AI in AWS, it's over 15 billion dollars annual run rate – 260 times larger than what we had at the beginning of AWS. So it's growing unbelievably quickly. In the last quarter, we grew 28% year over year in AWS on a very large 150 billion dollar annual revenue run rate. That's very unusual. The way the cash cycle works in a business like AWS is you have to lay out the cash for data centers, hardware, chips, and networking gear in advance of when you can monetize it. 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 free cash flow. But once revenue growth starts to outpace CapEx growth, which will happen in a couple years, you really like the return on invested capital and free cash flow. 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, free cash flow, and ROIC. Same pattern in AI. 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 revenue, operating income, and free cash flow.

Well, I think 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 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. I expect the same thing 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. 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, individual developers, researchers, 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 we're continuing to grow so fast on the marketplace side here. Look at the growth in quick commerce as an example. We have the broadest selection of products and get to people the fastest. We can deliver thousands of items in minutes, tens of thousands in a few hours, over a million items same day, over 4 million next day. It's very unusual. Quick commerce is doubling every quarter, and Prime customers who've tried quick commerce are buying three times more frequently than Prime members that don't. So we're thrilled with the growth here and we have a lot in front of us in India.

Well, 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. 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. 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. Layer on top of that the broadest selection with the shortest delivery times, plus Prime – a very unusual subscription program where customers get free and fast delivery, Amazon Pay with cash back, Prime Video, Prime Music. And then the announcement we made today: we're now extending our Amazon Now quick commerce offering to over 300 cities in India. It's a very powerful equation for customers, which is why it's growing so fast.

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

What's really interesting – and you mentioned it earlier – is that so many of the inventions that have been born here in India, that our team here experimented with and found success with, are being taken to other parts of the world. Quick commerce we're already meaningfully experimenting with and expanding in the US and Europe, but it started here in India. I expect quick commerce will be in virtually every marketplace we're in, and we'll continue to find inventions in India that we can take to other parts of the world.

The most important thing is it's amazing for customers to get this really broad selection in minutes. On the back end, we have micro fulfillment centers – much smaller units, organized differently. I was at one this morning and watched it in motion. I made an order that was delivered in a little less than 4 minutes. It's incredible, a magical customer experience. We're also doing things that are really different – not only delivering quickly, but in a way that's great for our Indian employees. We have efforts like academic scholarships for employees' kids, health insurance, mobile units for cooling and charging for both our own employees and others. We're trying to grow in a responsible way for the country, and we're having a lot of success so far.