Customers, homes and offices. And Alexa Plus is our next generation Alexa personal assistant, and she's meaningfully smarter, more capable, and more useful than her prior self. You can do all the things that you used to do, but every single one of those functions is better. I can give you just an example. There are so many examples, but if you have smart home controls with Alexa, now you can say, 'Alexa, I have guests coming over at 7 p.m. Could you raise the drapes? Could you raise the temperature by five degrees? Turn on the porch and driveway lights, and put on mellow dinner music.' And this is so easy. Most people will choose mellow dinner music.
There have been a lot of chatbots around that are good at answering questions, but they don't take actions. Alexa Plus is really going to be the first one that not only is highly intelligent to answer various questions, but she can do so many things for you. She can play music, play video, control your smart home, make reservations for you, and hire people to fix your oven. It really is the first big, large-scale practical use of generative AI by consumers.
I'm going to be able to see and use it. Naturally, I can see how you're going to obsess over it, whether it's ordering the latest Buffalo Wings in New York and seeing where the best place is to do that. But how are your stakeholders and shareholder base going to obsess about this, about generative AI in Alexa Plus? How is that adding value for them?
It allows you to control your smart home in a different way. So every single one of our consumer customer experiences gets better with Alexa Plus. And then, of course, Alexa has its own business model. We have a brand new lineup of devices coming in the fall that are beautiful. I think people are going to really like them. We have opportunities for new products and advertising in various interfaces like our mobile and desktop interface that's coming. And then we have subscriptions. So I think there's a sustainable business model there as well.
Talk to me about subscriptions because you're getting it free if you've got Prime. I get a lot with Prime now. Are you able to increase the prices that you think of Prime?
Prime is an incredible value. You get Prime Video, Prime Music, the grocery subscription, and our unique selling events. Prime is an incredible value, so you could increase it. To add on top of it, Alexa Plus is just great value. We don't have any plan right now, but I do think Prime's unusual value is why people use it so expansively. And to increase that use has been this invention, this innovation of generative AI, and that costs money.
And you've actually just took to the stage yesterday to say out of all companies, you are spending the most on AI. How much are you spending on it?
We don't disclose the exact amount, but we're spending a pretty significant amount of CapEx, and the lion's share of it is on generative AI. We could use it to monetize it. And we have this really interesting and very fortunate flywheel with AI inside Amazon. If your mission is to make customers' lives easier and better every day, which it is for us, and if you believe that all the customer experiences we know of today are going to be reinvented through generative AI, which we also believe, you're going to be building a lot of generative AI apps. If you build a lot of generative AI apps, and other companies are too, on top of the leading technology infrastructure platform, you can't help but get a lot of feedback from people on how they want those building blocks to be better. And if you're willing to invest in those building blocks, which we are, that feedback comes quickly, which can't help but make it easier and quicker for people to build generative AI applications, which means you get more running on the platform. So that flywheel is very unique for Amazon.
The lion's share, though, you did say basically $100 billion run rate for CapEx expenditure. Can you give us even a percentage breakdown of how much goes to distribution, logistics, and how much goes to AI?
Most of it, the lion's share, is more than 50%.
Is it more than 80%? We're playing the warmer and colder game.
Yes, exactly. I love a game. But talk to us about that capacity that you talked about. AI could grow even faster if you had all the chips you needed, all the power you needed, the motherboards you needed. How much faster could AI grow?
We're fortunate in that we're very big partners with Nvidia. But then we also have our own custom silicon and training chips, which we just released, Trainium, which is 30 to 40% more price performance than the GPU-powered instances, which is a big deal at scale if you're doing generative AI on the inference side. So we have maybe more chips than some others might have access to, but we still don't have enough. And there's just not enough power in the world right now, and we're all working really hard on that. I expect that to relieve some in the second half of this year. But right now, we have just insatiable demand.
We had amazing demand coming from Jensen Huang, who had his numbers out yesterday at Nvidia. Was there a limitation on the Nvidia chips in particular that pulled back?
Right now, people are very excited about it. I think that all the different providers of chips have been constrained to some extent. Some of the new generations may have gone through different evolutions, and when they're going to be released maybe a little later than people thought. There are some components like motherboards that we all use that particular ones are in shorter supply than others. So I do think there are some supply chain issues which I expect to get better. People are very excited about training, and to your question, whether we could see more demand there, we have gone back at least a couple of occasions to make more training chips than we had intended because we have so much demand. So I expect we'll have customers for as long as I can foresee wanting to run.
Who loses out here, do you think?
It's always a combination. There are people that just have a very small amount of accelerators that they need. They don't usually have a problem with something called capacity blocks, which is kind of like an on-demand way to use accelerators and generative AI chips, and that continues to grow. It's really the folks who have an idea for a new application but need a lot of chips where if we don't have the capacity, we have to give them what we can and push our partners to get it in sooner. And they can't get their initiatives done.
For their next version of their frontier model on top of Trainium and our customized silicon, they're going to use over 400,000 training chips. So yes, they have capacity. They're ramping up, and we're excited about that partnership and what they're building.
You mentioned the power side. How much is that something you're talking to the administration about? How much is the administration supportive of the build out that you need to do?
We have been talking to the administration, multiple administrations in this country over the years, as well as in other countries. I think the power shortage really snuck up on people right after the pandemic. I would say that the current administration is very receptive to it. They understand the constraints it's having on the economy right now and are convicted about solving it.
One of our close allies around the world is going to limit all global business. You are a global business. It's not something you're worried about?
I think you're talking about the AI Diffusion Act. I'm going to be curious to see where that goes. It was enacted pretty quickly at the very end of the last administration. I don't know how this administration feels about it, but I would say that we share the concern that it has limitations on certain countries who are natural allies of the US, who just to be able to do their business and for those companies to get done what they want on top of technology infrastructure platforms like ours, they're going to need more chips. In the scheme of things, it's not a big swinger. But I also think that there are so many countries who are in the early stages of their economic development who both really need access to the most cutting-edge, sophisticated technology to build the right customer experiences. That could be big geographic markets for companies like ours and lots of other technology companies, where I think it would be a shame to limit them. The AI Diffusion rules were brought in very swiftly by the Biden administration. All of this is in the context of US versus China and not wanting to get the most sophisticated equipment and chips into China.
