From Amazon Q and SageMaker to customer buying trends in 2024, Amazon CEO Andy Jassy explains why AI has already generated “a multibillion-dollar revenue run rate” for his company.

Amazon CEO Andy Jassy is bullish that Amazon Web Services’ artificial intelligence push will take the company to new heights in 2024 thanks to several key market trends this year.

“We see considerable momentum on the AI front where we’ve accumulated a multibillion-dollar revenue run rate already,” said Jassy, during Amazon’s first quarter 2024 earnings report last week.

Jassy is a cloud computing pioneer, as he led AWS when the Seattle-based company launched in 2006. He was CEO of AWS for years before taking over the reins of Amazon when former CEO Jeff Bezos departed in 2021.

[Related: AWS ‘Disappointed’ It’s No Longer A VMware Cloud On AWS Reseller; Future Of Product In Doubt]

AWS is now at a record $100 billion annual run rate and is the world’s cloud market share leader.

During Amazon’s earnings report, Jassy explained why generative AI is playing a major factor in AWS’ sales growth, which increased 17 percent year over year in Q1 2024 to $25 billion.

Here are Jassy’s five boldest remarks on how AWS’ AI push is fueling billions in sales this year, including its AI custom silicon, new AI assistant Amazon Q, and Amazon SageMaker.

Amazon SageMaker ‘Has Been A Game Changer For Developers’

Companies are starting to talk about the eye-opening results they’re getting using SageMaker.

Our managed end-to-end service has been a game changer for developers in preparing their data for AI (by) managing experiments, training models faster, lowering inference latency, and improving developer productivity.

Perplexity AI trains models 40 percent faster on SageMaker. Workday reduces inference latency by 80 percent with SageMaker, and NatWest reduces its time to value for AI from 12 to 18 months, to under seven months using SageMaker.

We see an increasing number of model builders standardizing on SageMaker.

Click through to read the other four Andy Jassy statements on how AI is driving AWS sales.

Amazon Has ‘Broadest Selection Of Nvidia Compute Instances Around, But Demand For Our Custom Silicon’ Is High

We continue to add capabilities at all three layers of the Gen AI stack. At the bottom layer, which is for developers and companies building models themselves, we see excitement about our offerings.

We have the broadest selection of Nvidia compute instances around, but demand for our custom silicon, training, and inference is quite high—given its favorable price performance benefits relative to available alternatives.

Larger quantities of our latest generation Trainium2 (chips) are coming in the second half of 2024 and early 2025.

‘Companies Have Largely Completed The Lion’s Share Of Their Cost Optimization’

Companies have largely completed the lion’s share of their cost optimization and turned their attention to newer initiatives.

Before the pandemic, companies were marching to modernize their infrastructure, moving from on-premises infrastructure to the cloud to save money, innovated at a more rapid rate, and to drive more developer productivity. The pandemic and uncertain economy that followed distracted from that momentum, but it’s picking up again.

Companies are pursuing this relatively low-hanging fruit in modernizing their infrastructure. And with the broadest functionality by a fair bit, deepest partner ecosystem, and strong security and operational performance—AWS continues to be their strong partner of choice.

Our AWS customers are quite excited about leveraging Gen AI to change the customer experiences and businesses. We see considerable momentum on the AI front where we’ve accumulated a multibillion-dollar revenue run rate already.

Amazon Q Is ‘The Most Capable Generative AI-Powered Assistant’

At the top of the AI stack are the GenAI applications being built. We announced the general availability of Amazon Q, the most capable generative AI-powered assistant for software development and leveraging company’s internal data.

On the software development side, Q doesn’t just generate code, it also tests code, debugs coding conflicts, and transforms code from one form to another. Today, developers can save months using Q to move from older versions of Java to newer, more secure and capable ones.

In the near future, Q will help developers transform their dotNET code as well, helping them move from Windows to Linux.

Q also has a unique capability called Agents, which can autonomously perform a range of tasks—everything from implementing features, documenting, and refactoring code to performing software upgrades.

Developers can simply ask Amazon Q to implement an application feature such as asking it to create an ‘add to favorites’ feature in a social sharing app, and the agent will analyze their existing application code and generate a step-by-step implementation plan, including code changes across multiple files and suggested new functions. Developers can collaborate with the agent to review and iterate on the plan, and then the agent implements it—connecting multiple steps together and applying updates across multiple files, code blocks and test suites. It’s quite handy.

Customers are gravitating to Q.

85 Percent Of Global IT Spent Still On-Premises; AI Is Driving Cloud Transformation

We remain very bullish on AWS. We’re at $100 billion-plus annualized revenue run rate, yet 85 percent or more of the global IT spend remains on-premises. And this is before you even calculate gen AI, most of which will be created over the next 10 to 20 years from scratch and on the cloud. There is a very large opportunity in front of us.

What people sometimes forget on the AWS side—it’s a $100 billion revenue run rate business—but we’re still 85-plus percent of the global IT spend is on premises.

If you believe that equation is going to flip, which we do, it means we have a lot of growth in front of us. And that’s before the generative AI opportunity, which I don’t know if any of us have seen a possibility like this in technology in a really long time—for sure since the cloud, perhaps since the Internet.

There’s a lot of work to be done to move from on-premises to the cloud. People do it and they get value out of it, which is why they modernize their infrastructure. But it’s work.

All of this generative AI set of workloads, which will transform every experience, they’re going to be built from scratch on the cloud largely. So it’s just tremendous opportunities there.