Building the Cloud for an Agentic World | AWS CEO Matt Garman

Matt Garman (0:00)

Agented workflows tend to perform better on AWS than anywhere else. Compute sandboxes, gateways, agent permissions versus people. A lot of those are things that we have built and are building and thinking actively about.

Raghu Raghuram (0:12)

The top frontier labs gobble up every available GPUs. At the same time, you want to promote newer companies that are going to become the enterprises of tomorrow. How are you thinking about balancing?

Matt Garman (0:21)

From the very beginning of when we launched AWS, startups have been the lifeblood of the core of what we do. These are the innovators that are at the edge of technology, understanding what's possible. We're very intentional about keeping capacity available for the startups. We recently announced we're going to be buying 2 million NVIDIA GPUs over the next couple of years.

Raghu Raghuram (0:38)

Your CapEx is seen as what, 200 or something?

Matt Garman (0:41)

$220 billion for 26 And we don't anticipate slowing down anytime soon because the demand is just massive.

Raghu Raghuram (0:48)

With all the debate around AI extension risks and the hugging face attack, what are CEOs asking you about all these things?

SPEAKER_3 (0:56)

Amazon plans to spend $220 billion in capital this year. And AWS CEO Matt Garman says they don't anticipate slowing down anytime soon. In this episode, E16z's Raghu Raghuram sits down with Matt to unpack what's driving one of the largest infrastructure build-outs in history, and how AI is changing the cloud itself. They discuss how AWS decides who gets scarce GPU capacity, the shifting bottlenecks from power and ships to memory and construction, and the company's bet on custom silicon like Trainium.

They also get into what changes when the agents increasingly write code and manage infrastructure. And that shares what AWS is seeing inside its own teams, where agents now write code and engineers increasingly manage teams of agents, accelerating how quickly new products can be built.

Raghu Raghuram (1:47)

Welcome to the pod, Matt. What a time we're living in, so I have a lot of topics to talk to you about.

SPEAKER_3 (1:52)

Awesome.

Matt Garman (1:52)

Thanks for having me. I'm excited.

Raghu Raghuram (1:54)

Yeah, absolutely. So let's start actually right from the beginning. So you are the first GM for EC2, and that was 2006, right?

And today you guys are what, 160, 170 billion in revenue?

Matt Garman (2:11)

Yeah, about 169, 170 billion, yep.

Raghu Raghuram (2:13)

Yeah, growing 35?

SPEAKER_3 (2:16)

37%.

Raghu Raghuram (2:17)

37% at 169

SPEAKER_3 (2:19)

Yeah.

Raghu Raghuram (2:20)

Crazy.

Matt Garman (2:20)

There's a ton of art. It's interesting to think about it from day one, when we had the first dollar revenue, but yeah. The interesting thing is we're still at the early stages of what the business can be and what the opportunity is for customers. Most workloads, there's a huge amount of workloads still that live on-prem today.

And the amount of compute that people are doing every single day is more than it was the day before. And so you see the tailwind from AI, you see the tailwind from migration into the cloud, and the business has grown really fast. It's been a super fun thing to be a part of.

Raghu Raghuram (2:49)

Yeah, it is, it is. I mean, they'll be writing history books about this. They'll be writing business books about this for a long time to come. I want to touch on the on-prem. That sort of boggles my mind.

I obviously did my best to keep them there for a long time.

Matt Garman (3:02)

You built a lot of stuff on-prem back in the day.

SPEAKER_3 (3:05)

Yeah, yeah.

Matt Garman (3:06)

Trying to now get all of that to move into AWS.

Raghu Raghuram (3:07)

Yeah, so we can talk about that later. So if you think about EC2 in the early days and you got your start with obviously selling to startups, and today the AWS cloud service, I mean, as you reflect on the evolution, what stands out, part one, and then part two we'll talk about how the nature of how you serve startups has changed.

Matt Garman (3:28)

Sure.

Well, like you said, actually, it's funny. So I actually interned for AWS in 2005 when we were first kind of was an internal project. It was my business school internship. And my project was actually to come up with an analysis of who we thought AWS would be most interesting to. And the answer was startups. Like, probably not, unsurprisingly. And so from the very beginning of when we launched AWS, startups have been the lifeblood of the core of what we do for a number of reasons. One is the value proposition is just so attractive, what AWS provides to startups. And we spend a lot of time and effort making sure that we're great partners to the startups, helping them not just provide infrastructure, but also advice and how to get your company up and running and how to think about your architecture. So it will scale eventually and a whole bunch of things that we do for the startups. But we also think that for us, it's just good business, because the startups today are the enterprises of tomorrow. And it's an imprecise number, but today, we estimate that maybe 30-40% of AWS revenue comes from companies that was a one-time startup in AWS's lifetime. So it's fun to see, for us, to see the companies grow over time and to get bigger and become enterprises effectively. And so that's why we invest so much to startups and why we pay so much attention to the brand new, two-people-in-a-garage-type startups.