When Matt Garman took the reins as CEO of Amazon Web Services (AWS) in June, he was handed a mission that stood out: to steer Amazon’s leading cloud services division in harnessing artificial intelligence (AI) capabilities for its clients. This task is critical, given that AWS is Amazon’s main profit engine. At the same time, he faces a landscape filled with formidable competitors like Microsoft and Alphabet, the parent company of Google, both of which are heavily invested in AI advancements.
In a recent conversation at the Wall Street Journal’s Tech Live conference, Garman spoke with Emma Tucker, the WSJ’s editor-in-chief, addressing AI-related ambitions and obstacles, the potential impact of regulatory measures, and Amazon’s decision to end remote work for corporate employees. Below are highlights from their discussion.
The AI Investment Gamble
Interviewer: Amazon, like other major tech companies, is investing heavily in AI. Do you worry that all this competitive spending might lead to a bubble? Or are these investments likely to yield meaningful outcomes?
Matt Garman: I strongly believe that AI, especially generative AI, is transformational—it will redefine every business, role, and workflow we know.
Interviewer: Some feel that Amazon lagged behind in embracing generative AI. How are you addressing this perception and attempting to catch up?
Garman: The launch of ChatGPT certainly shook the industry, leading numerous companies to rush their AI products to market. Our approach was a little different. We focused on the unique value of data. Companies want assurance that their data remains secure and is under their control, especially when integrated into applications. Additionally, we wanted to empower clients with tools to create their own unique AI models and applications.
Rather than relying on a one-size-fits-all model, we envisioned a range of models working together to build innovative applications, requiring an extensive set of tools to support a wide variety of business needs. This perspective led us to prioritize building a robust platform that allows enterprise clients, startups, and government entities to create applications that suit their specific needs rather than merely racing to market.
For example, we’ve developed projects that are expected to address various demands over the next few years, many of which are renewable. Nuclear energy, for instance, offers potential. We recently collaborated with Talen, a power producer in Pennsylvania, to revive nearly a gigawatt of nuclear power capacity that had been offline due to lack of demand. This is an example of our investment in AI and energy infrastructure to meet future needs.
Some small modular nuclear reactors (SMRs) hold promise, although they likely won’t contribute significantly until the 2030s. Nevertheless, they could become valuable energy sources in the coming decades.
Navigating Regulatory Challenges
Interviewer: Are you concerned that increased regulation could stifle AI’s development? Or do you feel the current U.S. regulatory stance is adequate?
Garman: We’re prepared to adapt to any regulations set by the government. However, our primary concern is to avoid policies that might unintentionally hinder innovation. Restrictive regulations could ultimately benefit competitors outside the U.S., potentially giving a leg up to countries like China, which we’re trying to stay competitive against.
Striking the right balance is challenging, and I don’t think an absence of regulation is the solution. Thoughtful regulatory frameworks are necessary, but they must be designed carefully to avoid suppressing the very innovation that has positioned the U.S. as a leader in tech.
The Shift Away from Remote Work
Interviewer: How did you reach the decision to end remote work for Amazon’s corporate employees, and what were some of the challenges?
Garman: Initially, we attempted a hybrid model where employees could work in the office three days a week. However, people chose different sets of three days, which hindered our goal of fostering collaboration and productivity. For instance, someone might come in on Monday while others preferred different days, disrupting cohesion.
Ultimately, we decided that in-person collaboration was vital for achieving our business objectives. We understand that this policy may not suit everyone, and that’s okay. Employees have the option to pursue opportunities elsewhere if they wish, but we believe that this approach best supports Amazon’s long-term goals.
In summary, Amazon, under Garman’s leadership, is navigating a complex AI landscape that includes massive investments, regulatory scrutiny, and internal cultural shifts. With AWS playing a central role in Amazon’s growth and profits, Garman’s approach to AI emphasizes security, control, and the development of tailored tools for a broad client base. Balancing these needs against competition from tech giants and adapting to evolving regulatory standards presents challenges, but Amazon is betting on a well-rounded, customer-centered strategy.
As for corporate culture, Garman and Amazon’s leadership recognize that some employees might not align with the return-to-office mandate. However, they believe it is essential to strengthen collaboration and ensure alignment across teams. This decision reflects Amazon’s ongoing strategy to navigate rapid technological change, regulatory landscapes, and internal cohesion as it moves forward in the highly competitive tech space.