Noah Berger/Getty Images for Amazon Web Services
- Amazon’s cloud chief Matt Garman says the company feels “quite good” about its AI investments.
- On Wednesday, Amazon announced the opening of its $11 billion data center in Indiana.
- Amazon said Tuesday that it plans to cut 14,000 corporate jobs to make it leaner.
Amazon is pouring billions into AI infrastructure, and its cloud boss says the company is confident its bets will pay off.
The Amazon Web Services CEO Matt Garman said in an interview with CNBC Television published Wednesday that the company feels “quite good” about its massive AI investments, despite rising fears that the AI boom could become a bubble.
“Others may have maybe more speculative investments,” Garman said in the interview recorded on October 17. “We’re very intentional about how we think about leveraging risk and thinking about how we have the long-term view of what this business looks like.”
Garman’s remarks come as Amazon announced the activation of Project Rainier, its $11 billion AI data center in rural Indiana. The announcement coincides with one of the company’s biggest ever rounds of layoffs.
Project Rainier, one of the largest AI data centers in the world, is dedicated to training and running models from Anthropic, one of Amazon’s key AI partners and a rival to OpenAI. More than 500,000 AWS Tranium 2 chips have already been deployed at the data center, which is fully operational and scheduled to double in scale by year-end, Garman said.
Garman told CNBC that AWS has spent nearly $100 billion in capital expenditures over the past year building infrastructure.
Amazon announced Tuesday that it plans to cut 14,000 corporate jobs to make it leaner as AI enables companies to “innovate much faster.”
Amazon’s senior vice president of people experience and technology, Beth Galetti, said in a blog post that Amazon needs to have fewer management layers to move faster.
The company is shifting resources to invest in its biggest bets, reducing in some areas and hiring in others, Galetti added.
Amazon has 1.55 million employees globally. The cuts represent about 4% of Amazon’s roughly 350,000 corporate employees.
AWS did not respond to a request for comment from Business Insider.
Amazon’s layoffs
Amazon’s latest layoffs are a continuation of the company’s yearslong effort to slim down and refocus.
In recent years, the company has trimmed management layers, tightened costs, and overhauled pay and performance systems. Amazon announced last September that most corporate staff would have to return to the office five days a week.
When growth slowed after the pandemic, Amazon started cutting unprofitable projects and a bloated workforce.
CEO Andy Jassy said in a June memo that AI-driven efficiency gains would further shrink head count. Earlier this year, Amazon froze hiring in its retail division, and in July, AWS also saw layoffs.
It’s not just Amazon cutting thousands of jobs this year. Microsoft announced plans in July to cut about 15,000 roles this year to focus on “security, quality, and AI transformation,” while Meta said last week it is cutting roles in its risk organization and replacing them with automation technology.
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