Amazon’s big bet in AI has been 20 years in the making
By Lisa Eadicicco, CNN
Seattle, Wash. (CNN) — Matt Garman helps make your online life – your Starbucks order, your Netflix binge, your Pinterest browsing– possible.
As the CEO of Amazon’s cloud computing division, he plays a major role in deciding how to deploy the computing resources needed to drive the internet – a responsibility that could soon include shaping the future of AI.
Few people know the business as well as Garman, who sat down with CNN at Amazon’s Seattle headquarters in mid-March. As an intern, he wrote the paper defining Amazon Web Service’s business strategy. And he was AWS’ first product manager when he joined Amazon full time in 2006, helping companies pivot to the web in the internet’s early days.
Twenty years after its March 2006 launch, AWS has become crucial for just about any company that relies on internet-powered tools. When AWS goes down, parts of society grind to a halt.
That’s big business for Amazon, raking in $128.7 billion in sales last year. But AI has upended the tech industry. Amazon’s already making major changes, like ratcheting up AI infrastructure spending to an expected $200 billion this year and axing tens of thousands of jobs.
Garman explained why Amazon views the moves as necessary. The downsizing is speeding up daily operations, and there’s enough pent-up AI demand to keep Amazon’s cloud tools busy for the next five to 10 years even if the tech stops advancing, he said.
Back when AWS launched, he said, “we had to explain what even the concept of cloud computing was, and why it was a thing, and why it’s something that Amazon would be involved in.”
Those conversations feel familiar again.
“Just fast forward to where we are today in AI, I think (it’s) actually much the same challenges,” Garman said. “A lot of people are going to have to think about how they do work differently.”
Amazon’s key to the AI race
AWS launched to provide virtual IT infrastructure and servers to businesses.
The pitch was simple: Amazon would handle backend technical operations so that companies could focus on their products and customers. But it was a risky bet for a company that rose to fame reshaping the retail industry.
“We’re very comfortable being misunderstood,” Amazon founder Jeff Bezos told Bloomberg Businessweek in 2006.
Amazonians still embrace that thinking today, Jeff Barr, chief evangelist for AWS and a 23-year veteran of the company, told CNN.
Walking through the reception area on my way to meet Garman, I passed a barista serving special lattes celebrating AWS’ 20th birthday.
We’re greeted by a disembodied voice over an intercom asking who we’re here to see on the restricted floor where Garman awaits. As I’m escorted to one of his personal conference rooms, I see a physical sign of AWS’s massive reach: a shelf adorned with autographed football helmets – the NFL is one of AWS’ biggest clients, a testament to how critical it’s become to life both online and off.
It’s a long way from the conversations about internet storage in a Seattle pub that gave rise to AWS. Garman tells me even his own parents struggled to understand what cloud computing was when he described his job to them back then.
“(It) was super hard to explain to them,” he said. “And my dad’s like, ‘Is it like the guy who comes to my office and fixes the printer?’”
But AWS eventually became indispensable to web entrepreneurs – and now its future depends on doing the same for AI companies.
Amazon is heavily involved with some of AI’s biggest players, like OpenAI and Anthropic, investing billions directly, helping distribute their services and providing tech for training their models. It’s also developed custom chips for AI tasks.
But AWS also wants to be vital for all companies through its Bedrock platform, which Amazon says more than 100,000 companies use to build their own AI apps and agents. Just as AWS’ early products allowed companies to access storage and computing power without making huge infrastructure investments, Amazon’s newer tools are making AI models more accessible, the company says.
Amazon is the largest cloud provider, putting it in a strong position to cash in on AI-related surges in computing demand. But rivals Microsoft and Google are eager to catch up.
Amazon’s share of the cloud market dipped from 39% in 2023 to 37.7% in 2024, according to market research firm Gartner.
Google’s cloud is currently attractive to startups because it’s slightly easier to use and get started with, according to Jacob Colker, managing director of the Seattle-based A12 Incubator, which helps AI startups build their businesses. Plus, Google has a more generous credit program for young companies.
Yet the tide could shift at any moment.
“The pace of innovation, obviously, is breakneck in the world of tech, and I think that’s equally true for a lot of the cloud providers,” he said.
Big bets worth hundreds of billions
Amazon’s monolithic data centers and millions of miles of fiber optic cables underpin the internet. But it’s the decisions made inside buildings like the glassy Amazon Reinvent tower in downtown Seattle that help determine Amazon’s future – and that of millions of other companies, if things go Amazon’s way.
Within its walls on an overcast Seattle afternoon, Garman and I discuss one of the biggest questions Wall Street has for Amazon: the $200 billion it expects to spend on capital expenditures this year related to AI infrastructure. The number was more than $50 billion higher than analysts’ expectations and the $131.8 billion Amazon spent on property and equipment in 2025.
Spending on AI has become so large that market research firm Gartner now categorizes companies like Amazon as “digital nation states” since they “control enough land, power, water (and) talent to actually rival countries,” said analyst Nicole Greene.
Where is that money going?
“This is not a secret, it’s data centers and servers,” Garman said.
The sky-high spending has fueled concerns about an AI bubble.
Tech giants insist AI demand is so feverish that they’re scrambling for compute power. Critics want to know when companies are going to see a return on those investments.
Amazon’s spending spree isn’t its only eyebrow-raising move recently. The company slashed roughly 30,000 jobs across two rounds of layoffs – one in October and another in January – to move faster as AI evolves, it claims.
Amazon previously said AI advancements didn’t drive most of the cuts, although CEO Andy Jassy said in June that the company will need “fewer people” as AI changes work. Garman said AI is playing a bigger role in operations, like supply chain planning, managing data center resources and, of course, software development.
AI coding tools that allow programmers to build their own personal workforces of AI agents are upending the software industry. Projects that would have taken two to three years at AWS are now being done in a matter of months with small teams, Garman said.
In fact, Garman said AWS’ teams are now “building at a rate that we haven’t seen for many years.”
Amazon’s moves may have struck a nerve because they hit on two of the biggest AI-driven concerns to emerge over the past year: the technology’s impact on jobs and whether it’s creating a bubble.
But some experts, like cofounder of the Stanford Institute for Human-Centered AI James Landay, previously told CNN the role AI is playing in software development has in some cases been overstated. And with every earnings call, analysts seem to have more questions about when the billions being poured into AI will show up in new products.
Garman is confident those bets will pay off.
At a recent meeting with around 150 senior technology leaders, 90% of the attendees raised their hands when asked if they were either seeing a “solidly positive” return on AI investments or expect to within the next six months, he said.
“I’m sure they exist,” Garman said about signs of an AI bubble. “But I have not seen them yet.”
-CNN’s Rhyannon Bartlett-Imadegawa contributed to this report.
The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
