In his 2024 Letter to Shareholders, released Thursday morning, Amazon CEO Andy Jassy introduces a new concept: Amazon’s “Why Culture,” or “YQ,” as he calls it.

That’s his phrase for natural curiosity — a willingness to challenge the status quo by asking why things are the way they are, and why they can’t be different.

One place this is playing out: Jassy’s campaign to reduce bureaucracy inside the company. He says he has received nearly 1,000 emails from employees since September, when he asked them to send messages to his “Bureaucracy Mailbox” with examples of excessive process and rules inside the company.

In response, he writes, Amazon has made more than 375 changes to cut inefficiencies — especially those slowing down decision-making and innovation.

Jassy also writes about progress on AI inside Amazon, saying that there are now more than 1,000 generative AI applications being developed inside the company, building on its work in AI foundation models and platforms.

“Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we’ve only fantasized,” Jassy writes, answering the question of why AI is so important.

All of this gave me an idea for my own “why” questions:

• Why not ask Amazon’s homegrown AI model, Amazon Nova, to compare and contrast this year’s annual letter with past installments?
• Why not get Nova to assign letter grades to Jassy’s annual letters?
• Why not include Jeff Bezos’ final letter to shareholders in the mix?

Here’s how Amazon’s Nova Pro model responded to my questions.

The annual letters to shareholders from 2021 to 2024 under Andy Jassy’s leadership provide insights into Amazon’s strategic responses to various challenges and its evolving approach to innovation and customer experience.

In 2021, Amazon grappled with the impacts of the pandemic and geopolitical events, which strained its fulfillment network and increased costs. The company’s response was characterized by rapid expansion of its network and investment in new technologies like AWS Graviton2 chips and Kuiper satellites. The letter highlighted the importance of iterative innovation and the role of AWS in helping businesses adapt to the changing landscape.

By 2022, Amazon had stabilized and shown significant growth in its consumer and AWS businesses. The company continued to invest in its fulfillment capabilities and introduced new services like Amazon Bedrock and Amazon Q. The letter emphasized the need for long-term thinking and investment in customer experiences, even in the face of macroeconomic uncertainties.

In 2023, Amazon focused on cost optimization and AWS expansion, while also addressing the challenges of a complex and dynamic market. The company introduced new AI chips and services, and made strategic investments in Prime Video and Kuiper. The letter underscored the importance of a customer-centric approach and the role of AI in driving future growth. The concept of “primitives,” foundational building blocks that enable rapid innovation, was discussed, reflecting a strategic approach to technology development.

In 2024, Amazon’s strategic investments in AI and generative AI services began to yield results, with significant revenue growth across all segments. The company launched new AI silicon and expanded its generative AI offerings. The letter highlighted the transformative potential of AI and the company’s commitment to making customers’ lives better and easier. The “Why Culture,” which encourages constant questioning and innovation, was prominently featured as a key driver of its success.

The evolution of themes across the letters suggests a shift from immediate crisis management in 2021 to a more strategic focus on long-term growth and innovation in 2024.

Amazon is positioning itself for a future where AI and machine learning are integral to its business model. The company’s investments in AI chips, generative AI services, and its fulfillment network suggest a strategic pivot towards technologies that can deliver more personalized and efficient customer experiences.

The letters also reveal a company that is increasingly aware of its own scale and the need to manage it effectively. The focus on cost optimization and the introduction of new services indicate a balance between maintaining operational efficiency and pursuing growth opportunities. However, the company’s size and the associated bureaucracy present ongoing challenges, as evidenced by its efforts to streamline processes and reduce costs.

Overall, the letters paint a picture of a company that is not only responding to immediate challenges but is also actively shaping its future through strategic investments and a culture that encourages continuous innovation and questioning. The company’s approach to technology development, suggests a long-term strategy for sustainable growth and innovation, even as it grapples with the complexities of managing a large-scale operation.

I’ve read all the letters, including the one today, and that seems on the mark to me.

So let’s get to the grades. Nova seemed a little hesitant to weigh in on this question — maybe it’s aware of who’s paying for its GPUs — but in the spirit of constructive feedback, it agreed to play along.

Assigning letter grades to annual letters to shareholders is a subjective exercise, but here’s an assessment based on the content and strategic focus of each year:

2021: C

The letter reflects a company grappling with immediate challenges posed by the pandemic and geopolitical events. While Amazon demonstrated resilience by expanding its network and investing in new technologies, the focus was more on crisis management than strategic growth. The letter lacked a clear vision for the future beyond addressing current issues.

2022: B

The 2022 letter showed a stronger strategic focus, with significant growth in consumer and AWS businesses. The company continued to invest in fulfillment capabilities and introduced new services. However, the letter still emphasized the need for long-term thinking and investment in customer experiences, indicating a transition phase.

2023: A-

The 2023 letter presented a more mature strategic approach, with a focus on cost optimization, AWS expansion, and the introduction of new AI chips and services. The discussion of “primitives” indicated a deeper commitment to building foundational technologies for long-term innovation. The letter also addressed the challenges of managing a large-scale operation.

2024: A

The 2024 letter showcased a company that had successfully navigated through crises and was now reaping the benefits of its strategic investments in AI and generative AI services. The letter highlighted significant revenue growth and the transformative potential of AI. The “Why Culture” was prominently featured, indicating a strong commitment to making customers’ lives better and easier. The letter demonstrated a clear vision for the future and a balanced approach to managing its size and bureaucracy.

These grades are based on the clarity of strategic vision, the effectiveness of crisis management, the depth of innovation, and the company’s ability to balance growth with operational efficiency.

Here’s the comparison between Jassy’s letters and Bezos’ 2020 letter, his final one.

Tone and Style:

• Jeff Bezos: Bezos’ final letter is characterized by a reflective and somewhat nostalgic tone. He reminisces about the early days of Amazon, the exponential growth in value, and the impact on shareholders. The letter is personal, with anecdotes about his family and a focus on the long-term vision of Amazon.
• Andy Jassy: Jassy’s letters, particularly the 2024 letter, adopt a more direct and pragmatic tone. While he acknowledges the company’s history and success, his focus is on current and future strategic initiatives, particularly in AI and customer experience.

Strategic Focus:

• Jeff Bezos: Bezos emphasizes Amazon’s mission to be Earth’s Most Customer-Centric Company and introduces new initiatives like Earth’s Best Employer and Earth’s Safest Place to Work. He also discusses the Climate Pledge and the importance of differentiation and originality.
• Andy Jassy: Jassy’s letters show a shift towards a more operational and technology-driven focus. The 2024 letter highlights the transformative potential of AI and generative AI services, while the 2023 letter discusses “primitives” as foundational building blocks for innovation.

Innovation and Technology:

• Jeff Bezos: Bezos talks about the importance of innovation in a broad sense, including new business models and sustainability initiatives. He mentions the Climate Pledge and the company’s efforts to become a zero-emission platform by 2040.
• Andy Jassy: Jassy’s letters place a stronger emphasis on specific technological innovations, particularly in AI and machine learning. The 2024 letter discusses the launch of new AI silicon and generative AI services, while the 2023 letter introduces the concept of “primitives.”

Customer Experience:

• Jeff Bezos: Bezos consistently emphasizes the importance of customer experience, but his approach is more holistic, considering the broader impact of Amazon on society and the environment.
• Andy Jassy: Jassy’s letters focus more on the technological aspects of improving customer experience, particularly through AI and machine learning. The “Why Culture” in the 2024 letter reflects a deeper commitment to questioning and innovation in this area.

Employee Focus:

• Jeff Bezos: Bezos discusses the importance of being Earth’s Best Employer and Earth’s Safest Place to Work. He highlights initiatives like WorkingWell and the increase in minimum wage.
• Andy Jassy: Jassy’s letters, while acknowledging the importance of employees, place a greater emphasis on the technological and operational aspects of the business. The focus is more on how technology can drive better customer experiences and operational efficiency.

Conclusion:

• Bezos’ final letter provides a broad and visionary perspective on Amazon’s future, emphasizing the company’s impact on society and the environment.
• Jassy’s letters, particularly from 2023 onwards, show a more focused and operational approach to innovation and customer experience, with a clear emphasis on AI and machine learning.
• Both leaders demonstrate a commitment to Amazon’s core mission, but their approaches reflect the different challenges and opportunities they faced during their tenures.

This isn’t entirely fair. As Jassy wrote in his first annual letter, Bezos as Amazon’s founder set a high bar for writing annual letters to shareholders. They were so widely read and referenced that they ended up being compiled into a book.

That said, the comparison does illuminate the differences in their leadership styles and the evolution of the company’s focus under Jassy as CEO.

I could (and did) keep asking Nova questions about the 2024 letter, but that’s probably enough “whys” for this post.

But just to turn the tables on Amazon’s AI model, I asked for an assessment of Nova’s analysis from OpenAI’s ChatGPT 4o, which for the moment is the gold standard of AI chatbots in my own day-to-day work.

I thought this take from ChatGPT was on the mark: “It’s missing a little spark. If this is Nova’s response, it could use just a bit of style — a confident, observant tone that implies, ‘I’ve read every letter. I’ve seen the throughline.’ “

ChatGPT also put together this great chart. (Click to enlarge.)

Read Andy Jassy’s full 2024 letter to shareholders here.

Amazon CEO Andy Jassy’s total compensation reached $40.1 million in 2024, due largely to strong gains in the company’s stock price that boosted the value of the shares he vested during the year.

The compensation figure, disclosed Thursday morning in the company’s annual proxy statement, was up 37% from $29.2 million the prior year. 

Although Jassy vested fewer shares — 211,000 in 2024 compared to 225,340 in 2023 — the value of those shares rose sharply to $38.5 million, up from $27.8 million the year before, because of Amazon’s stock gains.

Other components of Jassy’s total compensation: 

• Base pay was unchanged at $365,000.
• Company 401(k) contributions totaling $6,900.
• Personal security costs of $1.12 million, up from $986,164 in 2023.
• $105,000 for a required Hart-Scott-Rodino (HSR) Act filing fee, which Amazon paid on Jassy’s behalf.

Amazon’s stock jumped more than 40% in 2024, outpacing the broader market. The gains coincided with strong growth in its cloud business, and progress in AI.

(The company’s shares are down more than 13% so far this year — including a plunge and partial recovery along with the rest of the market after recent tariff announcements from President Trump.)

Jassy’s decline in vested shares in 2024 reflected the vesting schedule for a 10-year equity grant awarded to him when he became Amazon’s second CEO in 2021, succeeding founder Jeff Bezos in the role.

That grant, originally valued at $212 million, vests through 2031 regardless of Amazon’s performance — a structure that has drawn scrutiny from some shareholders and proxy advisory firms.

The number of shares scheduled to vest each year declines, by design, to balance out the company’s goal of long-term gains in the share price.

Jassy did not receive any new stock grants in 2024, according to the proxy, and he has not received any since the 2021 stock grant.

Under a pay ratio disclosure in the proxy filing, using an SEC formula, Amazon said Jassy’s base pay and other compensation (primarily security) of $1,596,889 for 2024, compared with a median employee compensation of $37,181 (for all full- and part-time permanent and temporary employees worldwide, except the CEO).

That translated into a reported pay ratio of 43:1, compared with a ratio of 37:1 a year earlier. The increase in the ratio was largely due to the increased security costs and the new HSR filing fee. In the U.S., the company’s median annual total compensation rose to $47,990, up from $45,613 a year earlier.

By comparison, Microsoft CEO Satya Nadella’s take-home pay was $51.9 million for fiscal 2024, excluding the value of stock grants scheduled to vest in the future. On the same basis, Walmart CEO Doug McMillon’s take-home pay was $34.9 million, and Alphabet/Google CEO Sundar Pichai’s take-home was $164.2 million.

What happens when the AI senses the frustration or joy in your voice?

A new speech-to-speech AI model from Amazon, called Nova Sonic, unifies speech recognition and generation to deliver more natural voice interactions — part of the Seattle tech giant’s broader effort to develop human-like intelligence in competition with Google, OpenAI, and others.

Among other advances, Amazon says Nova Sonic picks up on tone of voice, adapting to the style and emotions of users. An angry customer on a support call might hear a calm, steady voice in return, while someone sounding excited could get a more upbeat response.

“I think of intelligence as inseparable from context,” said Rohit Prasad, Amazon’s senior vice president of artificial general intelligence, who leads a central team working on the company’s most advanced AI technology. 

“If you’re excited about Hawaii, it will be excited about it,” he explained, as an example. “If you’re not, then it will suggest a separate destination.”

Nova Sonic will be available to third-party developers through Amazon’s Bedrock service. Amazon is already using components of the model internally, in products including its newly released Alexa+ voice assistant. 

Unlike traditional voice systems that stitch together separate models for speech recognition, language processing, and text-to-speech, Nova Sonic combines all three in a single architecture, according to the company. 

Amazon says this integration allows the model to preserve the full context of a conversation — including intonation, pacing, and intent — making interactions feel more conversational and responsive. 

It can also take action in the middle of a conversation, like pulling up flight options or checking an account, without breaking the flow of the interaction.

Amazon is making Nova Sonic available via a new streaming API built for real-time voice applications. It currently supports English with a few different voices and accents. Amazon says it’s working on support for more languages.

Nova Sonic enters a growing field of voice and multimodal AI models, as companies race to build more human-like digital assistants. OpenAI recently launched GPT-4o, its own real-time speech model, while Google has added conversational voice capabilities to its Gemini assistant. 

Based on its testing, Amazon says Nova Sonic outperforms these rivals on speed and cost, with lower latency and better pricing.

For example, Amazon says Nova Sonic responds in just over a second on average — faster than both OpenAI’s GPT-4o and Google’s Gemini Flash 2.0 in tests run by the research firm Artificial Analysis. The company says Nova Sonic is nearly 80% cheaper to use than GPT-4o for real-time voice interactions.

Prasad, previously Alexa’s chief scientist, now oversees Amazon’s AGI group, reporting to Amazon CEO Andy Jassy. 

The long-term goal, Prasad said in an interview, is to create unified models that can handle any kind of input and respond in the most natural way — delivering the “general” in artificial general intelligence.

“I actually think you’re merging the powers of the human and machine together,” Prasad said of AGI initiatives. “That’s why this is so important.”

He called Nova Sonic “a huge step” in that direction. 

Companies testing Nova Sonic include ASAPP, for customer service calls; Education First, applying it to language learning tools; and Stats Perform, which is using it to deliver real-time sports insights through voice.

Amazon says Nova Sonic is designed to integrate with company systems to access real-time information such as pricing, availability, or schedules. The model can also be used to carry out tasks mid-conversation, including making reservations or offering alternative options.

Nova Sonic is the latest addition to Amazon’s Nova line of AI models, introduced by Jassy at AWS re:Invent in December, which includes AI for generating and understanding text, images, and video. It follows Amazon’s recent release of a research preview of Nova Act, for building web-based AI agents. 

Jamie Siminoff has returned to Amazon as a vice president of product overseeing the company’s home security camera arm and related businesses.

Siminoff, the Ring founder and longtime CEO, left Amazon in 2023, five years after the Seattle tech giant acquired Ring for a reported $1 billion.

Former Discord and Meta exec Elizabeth (Liz) Hamren replaced Siminoff as Ring CEO in 2023.

“Liz is deciding what’s next and looking at opportunities inside and outside Amazon,” an Amazon spokesperson said in a statement.

Siminoff will head up a team that works on Ring, Amazon Key (in-garage delivery), Amazon Sidewalk (neighborhood wireless network), and Blink (security cameras).

“With this transition, we are excited to welcome Jamie back to the team — he’s an inventor at his core and has a lot of passion for how Ring can make customers’ lives better and easier,” the spokeperson said.

Siminoff started Ring in his Southern California garage in 2012, and was famously rebuffed by investors on Shark Tank.

Under Amazon, Ring has dramatically expanded its product lineup beyond its signature smart doorbells into a wide variety of home cameras, exterior smart lighting, home security systems, a vehicle dashboard camera and even a flying indoor security camera.

While the market for in-home cameras has matured over the past 10 years, it continues to be reshaped by new technologies, such as AI and drones.

In a blog post published by Amazon on Friday, Siminoff called the AI transformation ” a once-in-a-generation opportunity.”

Ring has also weathered a series of controversies inside Amazon, including revelations about its policies and practices for sharing video footage with law enforcement; and previously lax security measures that gave hackers access to private home cameras, allowing them to see and talk with children in footage that quickly went viral.

Amazon also reached a $5.8 million settlement with the FTC in 2023 over allegations that the company made misleading claims about its privacy and security practices, and failed to protect consumers’ video data from unauthorized access. Amazon disputed the claims.

Amazon’s devices unit is led by Panos Panay, Amazon’s senior vice president of Devices and Services, a longtime leader in the world of consumer technology who joined the company in 2023 after a long tenure with Microsoft.

Move over, Microsoft. Amazon is the latest Seattle-area tech giant being tied to a potential acquisition of TikTok.

The New York Times reported Wednesday that Amazon put in an offer letter addressed to Trump administration officials, but that those involved in talks about the future of the video-sharing app do not appear to be taking the bid seriously.

Prompted by national security concerns related to TikTok’s Chinese owners, ByteDance, lawmakers passed a law last year to force a sale of TikTok, which was supposed to take effect in January. President Trump managed to force a delay until this Saturday, and without a sale, TikTok faces a ban in the United States.

The Times reported that another potential deal could involve bringing on a number of new U.S. investors, including tech giant Oracle, and Blackstone, the private equity firm, while sidestepping a formal sale.

Microsoft and Walmart made a joint bid for TikTok in 2020 that was rejected by ByteDance. In that bid, reportedly in the range of $20 billion to $30 billion, Microsoft insisted on acquiring full control of the social video app’s U.S. operations, data, source code and algorithms, declining to settle for a lesser deal that didn’t put those key assets in its hands.

The Times noted Amazon’s ties to TikTok, which has become a major retail shopping player with its TikTok Shop, saying that many influencers on TikTok encourage people to buy products on Amazon, which gives influencers a cut of the transactions. 

Earlier this year, Amazon shut down “Inspire,” a TikTok-like short-form video and photo feed in its mobile app designed to help customers discover and shop for products.

TikTok has 170 million users in the U.S. ByteDance has an engineering office in Bellevue, Wash.

There’s another tech giant in town.

Canadian e-commerce behemoth Shopify has inked a deal for office space in Bellevue, Wash., becoming the latest tech company to tap into the Seattle region’s deep talent pool.

Shopify is subleasing approximately 31,000 square feet from Google at the 112 @ 12th building in downtown Bellevue, just east of Seattle. The company plans to open the new office in May.

“We’re on the lookout for engineering wizards to join our talented team and help power our millions of merchants around the world,” a company spokesperson said in a statement.

There are more than 100 companies with engineering centers in the Seattle region, one of leading global centers of tech talent, including engineers specializing in artificial intelligence.

A handful of out-of-town tech companies have opened new offices in Bellevue recently, including Zoom and OpenAI. Snowflake, ByteDance, and Pokémon are also expanding their presence in the city.

WeWork, Salesforce, and eBay recently renewed leases in Bellevue, helping buoy the Eastside office market that has a 20% vacancy rate, according to a report from Broderick Group. That’s up from 5.8% in 2019.

Amazon, meanwhile, has quickly grown its footprint in downtown Bellevue after sparring with Seattle lawmakers in recent years over corporate tax initiatives. Bellevue is the focus of much of the company’s future growth in what it calls its Puget Sound headquarters region, with plans to employ 25,000 people in the city.

Shopify helps businesses run their online stores, offering various services including payments, shipping, and more. The company’s Q4 revenue was up 31% to $2.8 billion, with $465 million in operating income.

Shopify and Amazon are competitors in some sense — customers don’t buy products on Shopify.com, but both cater to small businesses and online merchants. The companies have partnered in the past, including a deal for Buy with Prime integration in 2023.

Shopify went public in 2015 and its market capitalization is more than $126 billion. The company has a remote-first work environment. It had about 8,100 employees worldwide as of Dec. 31, according to its annual report. More than 100 employees are based in the Seattle region already, according to LinkedIn.

Editor’s note: This analysis is written by Christopher Budd, a tech industry veteran who previously worked at the Microsoft Security Response Center.

Earlier this month, Google announced plans to acquire Israel-based Wiz for the nearly jaw-dropping price of $32 billion (yes, with a “b”). Not only is this the biggest cybersecurity deal (yet) in terms of money — it’s also another instance of Google swooping in with a very big, open checkbook to snap up a cybersecurity industry leader to fold into the Google Cloud Platform (GCP). 

This makes it clearer that Google sees security as a competitive differentiator in the cloud and is another step toward Microsoft’s model of integrating cloud and security in-house — and away from Amazon Web Services’ more hands-off strategy of relying primarily on a security partner ecosystem. 

Google’s move on Wiz is very similar to its acquisition of Mandiant in 2022 when it paid $5.4 billion for arguably the single best known incident response (IR) company in the world. Since then we’ve seen that Google bought Mandiant not because Google wanted to become a player in the IR space but because Google wanted to have some of the best IR capabilities in the world protecting GCP and its customers. 

Wiz is a leading company in the Cloud Native Application Protection Platform (CNAPP) space. CNAPPs provide a critical security layer to today’s cloud computing. If we look at the Mandiant acquisition as a blueprint, we can surmise that Google plans to take another industry-leading company and focus it on securing GCP.

Meanwhile in Redmond, IR and CNAPP are capabilities that Microsoft’s cloud offering has had for years through internal development. I can attest that Microsoft’s cloud IR process evolved out of the work of the Microsoft Security Response Center (MSRC) that I was a part of from 2001-2010. This is the kind of capability that Google bought with Mandiant. And Microsoft has had Defender for Cloud since 2021, a product which is a direct competitor for Wiz. 

In both cases, Microsoft evolved a cloud security capability in-house and then Google saw a competitive gap and went out and paid (a lot) for an industry leader to catch up or leapfrog having these capabilities be available in-house.

If Microsoft builds cloud security capability in-house over time and Google is going out and buying it to close the gap with Microsoft, what about AWS? Where is Amazon in this all? 

Throughout its history, AWS has taken a more hands-off approach, looking to partners to provide capabilities rather than building in-house or buying to bring in-house. It’s more of a utility model ensuring there’s a “dial tone” (services when you need it) but not much else. For anything beyond that you need to work with AWS partners. Having worked for companies that have cloud security offerings, I can attest that overall AWS has had a much more robust partner engagement and ecosystem than Microsoft or Google. A prime example is that AWS re:Invent is cloud computing’s biggest annual event, even though it’s a single vendor’s event.

While AWS has in-house IR capabilities, it’s more akin to what you see with other internet infrastructure companies: an in-house IR team that keeps the properties (and customers on those properties) safe, not one that is ready to assist customers directly like you see with both Google and Microsoft. It’s also not an IR group that is engaged actively in the security research community through bug bounties and original research in the same focused way that Microsoft and Google are. 

AWS has been busy over the past year rolling out various security-related services. In December it launched a new AWS Security Incident Response service and announced new AI and machine learning threat detection capabilities within Amazon GuardDuty, its security product for AWS accounts and workloads.

But when it comes to CNAPP, AWS hasn’t built its own “Defender for AWS.” And as Averlon CEO Sunil Gottumukkala noted recently in GeekWire, Wiz and AWS have had a very close partnership. By acquiring Wiz, Google is not only adding Wiz’s capabilities to GCP, but they’re also effectively taking Wiz off the table for AWS, putting even more distance between AWS on one side and Microsoft and Google on the other in the CNAPP space. AWS has plenty of other CNAPP partners like Orca, Trend Micro, and Palo Alto among others. But the fact remains that Wiz, a major AWS partner is now effectively in enemy hands.

Ian Fleming famously noted in Goldfinger that “Once is happenstance. Twice is coincidence. Three times is enemy action.” This is now the second instance where Google has gone out and paid top dollar for a cloud security capability that Microsoft developed in-house and both Google and AWS were lacking.

A third major cloud security acquisition by Google would clearly show that Google sees security as a critical competitive arena for cloud. The fact that both these major acquisitions have been in areas where Microsoft already had a presence serves as validation of Microsoft’s long-term cloud security strategy to date. But it’s no guarantee that the next big cloud security acquisition by Google will be playing catch up to Microsoft: Google could outflank Microsoft next time.

Meanwhile, the cloud security gap with AWS is looking bigger and a third acquisition could make that gap even bigger yet.

For every action there is a reaction: it’s possible that AWS and/or Microsoft won’t take the Wiz acquisition lying down but will themselves move to “leapfrog by checkbook” around cloud security. Or in the case of AWS, take a different approach and capitalize in some way on its existing partnership model and find ways to make it even more robust and its partners resistant to take over by Google and/or Microsoft.

[Update, Monday, March 31: Amazon’s Alexa+ Early Access page is now live, and the company confirmed that the new Alexa is starting to roll out “to a small number of customers, and will be ramping over the next few weeks,” with the goal of getting Alexa+ to million of customers in May.]

This week on the GeekWire Podcast: A conversation with Daniel Rausch, Amazon’s vice president of Alexa and Echo, recorded at the company’s Seattle headquarters.

Rausch explained the company’s vision for Alexa+, Amazon’s next-generation voice assistant, in advance of its upcoming rollout through an early access program. Alexa+ promises more fluid, natural conversations, integrating with a wider range of services and devices — including the ability to act autonomously on a user’s behalf.

Alexa “has been completely re-architected around large language models,” Rausch said, describing the company’s shift from the rules-based systems that powered earlier versions of the assistant.

It’s a significant upgrade for Amazon’s longtime voice assistant, judging from the live demos that Rausch walked me through before and after the podcast recording.

In one example, Alexa+ acted as an “agent” by booking a dishwasher repair through Thumbtack. It gathered details via voice, filled out the web form step-by-step behind the scenes, and sent a request — showing how it could autonomously complete tasks online and notify the user as it progressed.

Still, it remains to be seen how much value people will find in using their voice for these tasks, versus the familiar simplicity of a smartphone app or web browser.

And at a fundamental level, Amazon is playing catch-up with OpenAI’s ChatGPT and many other AI chatbots in the world of conversational artificial intelligence.

“Alexa is not a chatbot. Alexa is Alexa,” Rausch said, speaking optimistically about how the new Alexa+ will be received. “We think customers are going to love it. … One of the biggest things they’ll love about it is how much they can do with it.”

He also addressed key business questions about Alexa+, including Amazon’s pricing strategy, its rollout to third-party platforms, and how the company hopes to differentiate itself in a competitive AI landscape.

Listen to the conversation above, and subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Related links:

• What Alexa’s AI upgrade means for Amazon’s business and Alexa users
• Amazon’s new Alexa+ uses generative AI to personalize conversations and automate tasks

Audio editing by Curt Milton

• The feature asks shoppers to describe they are looking for — “the latest pickleball gear and accessories,” for example — and makes relevant suggestions. It then notifies the customer when there are new items related to the prompt or “noteworthy updates.”
• The feature is available for a subset of U.S. users on Amazon’s app and mobile website, and will roll out to more customers in the coming months, according to a blog post.
• It’s the latest AI-related shopping tool from Amazon, which rolled out its “Rufus” shopping assistant last year.
• CNBC reported that Amazon is also testing a new chatbot for health and wellness questions.

Previously: Amazon’s new Alexa+ uses generative AI to personalize conversations and automate tasks

Amazon says it seized more than 15 million counterfeit products in 2024 — more than double the prior year — as part of a growing effort to intercept fake goods before they reach customers.

The company says it’s expanding its use of AI behind the scenes, while also working with law enforcement to go after key sites around the world where counterfeits are fabricated and distributed.

“We’re seizing more products before they reach our store due to our efforts to stop counterfeit products at the source,” said Kebharu Smith, director of Amazon’s Counterfeit Crimes Unit, a former federal and state prosecutor who joined the tech giant in 2020 to help fight fraudulent goods.

For example, Amazon says it worked with Chinese law enforcement on cases that led to more than 60 raids in 2024. More than 100 suspected counterfeiters were detained, and several were convicted.

Those are some of the details from Amazon’s new Brand Protection Report, released Tuesday night. It’s the latest effort by the company to address longstanding criticism that it hasn’t done enough to keep counterfeit goods from being sold on Amazon.com.

Amazon says it’s using AI to fight fakes in a variety of ways: 

• AI scans billions of attempted changes to product listings each day to identify counterfeit products and detect infringing content.
• Amazon’s computer vision technology scans product images and logos to help identify knock-offs.
• The company uses multi-modal large language models to analyze images, text, and pricing patterns on product listings. This can sniff out “even subtle manipulations designed to evade detection.”
• AI analyzes behind-the-scenes data such as shared IP addresses, banking info, and account activity, looking for criminal networks. 
• AI and automation are also used in seller vetting, including ID verification tools that detect forged documents and suspicious account behavior during the onboarding process.

Amazon has faced years of scrutiny from brands, regulators, and consumer advocates over its approach to counterfeit products.

• In the past, companies including Nike, PopSockets, and Birkenstock have pulled products or partnerships over concerns about fakes.
• Apple once revealed that 90% of “genuine” chargers it purchased from Amazon were counterfeit.
• Some brands have accused Amazon in the past of profiting from fake goods, while dragging its feet on enforcement.

Amazon spends more than $1 billion annually to fight counterfeits, and points to signs of progress on a variety of fronts.

• Amazon says its systems now block more than 99% of fraudulent product listings before brands need to report them.
• Amazon’s Project Zero initiative offers automated counterfeit detection and other tools to fight fake products. It has been used by more than 35,000 brands.
• Its Transparency program has verified more than 2.5 billion product units using unique serialization codes. The company says 88,000 brands are enrolled. 
• Amazon has pursued more than 24,000 “bad actors” through civil litigation and criminal referrals since starting its Counterfeit Crimes Unit in 2020.

“Counterfeiting is one of the oldest crimes on the books, and it’s a huge problem across the entire retail industry,” Smith said.

He said Amazon is “doing what we can to make sure we’re protecting these brands, policing our store, going after these bad actors aggressively, and educating and protecting our customers.”

Read the Amazon report here.

For many years, Amazon has been trying to put its Alexa voice assistant at the center of the smart home. But right now, Alexa in its current state can seem downright dumb at times. 

And for anyone who has used voice interaction mode in popular generative AI chatbots, the obvious question has become, why the heck can’t Alexa talk to me like ChatGPT does? 

But now it will — or at least that’s what Amazon is promising.  

Amazon’s Alexa+ is an upgraded version of its AI-powered assistant, promising more natural conversations, improved context awareness across smart devices, and more seamless and proactive integration into daily routines. Alexa+ is rolling out in the next few weeks, starting on newer Echo devices.

This week on the GeekWire Podcast: Michael Levin and Josh Lowitz of Consumer Intelligence Research Partners (CIRP) discuss the Alexa and Echo business, and what the Alexa+ service means for the company and Alexa users. CIRP studies consumer behavior to provide insights for investors and industry leaders.

Related links and coverage

• CIRP: Amazon Report on Substack. (Check out CIRP’s Apple Report, as well.)
• CIRP’s Amazon Report: Alexa, Should I Pay for Alexa+? Or Get a New Echo?
• GeekWire: Amazon’s new Alexa+ uses generative AI to personalize conversations and automate tasks
• Amazon: Introducing Alexa+, the next generation of Alexa
  

Top takeaways

The state of the Alexa/Echo business:

• Echo smart speakers have a dominant market share, around 75%, but growth has slowed considerably after an initial rapid adoption period, according to CIRP research.
• Right now, the primary use cases for Echo devices are still playing music/audio and basic question answering, rather than more advanced home automation or shopping tasks.
• Around 30% of Amazon Prime members own an Echo device, while only 12% of non-Prime members do, indicating the devices are more popular with Amazon’s core customer base, according to CIRP research.
• Amazon says the total number of Alexa-powered devices globally is around 600 million, but that includes third-party devices beyond just Echo speakers.
• Alexa+ is a major upgrade for Amazon’s voice assistant, but Alexa is playing catch-up. Some of the core features in the upgrade are table stakes in the larger world of generative AI these days.

Some of the new capabilities with Alexa+:

• Alexa+ is expected to communicate more naturally and maintain continuous conversations, rather than requiring users to repeatedly say “Alexa” or other wake words.
• Amazon says Alexa+ will be able to navigate online services, discover relevant providers, and complete tasks like arranging home repairs or ordering food with little or no user intervention.
• The new Alexa can also understand and respond to the user’s tone of voice, adjusting its responses and remembering the context of conversations across different devices.
• Alexa+ offers a persistent memory for important details like frequent flyer numbers, restaurant names, family recipes, or food preferences among different people.
• It will be able to create complex Alexa routines from voice instructions, without using the Alexa app.

(See Amazon’s list of 50 things to try with Alexa+ for more.)

The business model for Alexa+:

• Alexa+ will be available for free to all Amazon Prime members. This suggests Amazon’s primary goal is to drive Prime membership, rather than generate direct revenue from Alexa+.
• For non-Prime members, Alexa+ will cost $19.99 per month. This pricing seems high (compared to $14.99/month for the larger Prime bundle, which will include Alexa+. It’s unlikely that many non-Prime customers would be willing to pay that much just for Alexa+.
• Older devices not compatible with Alexa+ represents a significant portion of the current Echo installed base, which could drive hardware upgrades among people interested in the new AI capabilities.

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Amazon and the U.S. Federal Trade Commission will get a chance to educate the federal judge in the FTC’s antitrust case against the tech giant on the economic principles behind their respective positions Friday in U.S. District Court in Seattle.

Judge John H. Chun asked for the “Economics Day” hearing with the goal of being “as educated as possible regarding the economic theories in the case,” according to court filings. While the presentations could ultimately influence the judge’s perspective on the issues, no decision is expected to result directly from the hearing.

The landmark case was originally filed in September 2023.

The FTC alleges that Amazon maintains monopoly power by engaging in anti-competitive practices that harm consumers and sellers. Amazon disputes the FTC’s market definitions and counters that its business practices are not only lawful but also benefit both consumers and sellers.

The hearing comes at a time of transition for the FTC, with Andrew Ferguson appointed as chairman by President Trump in January, taking over for Lina Khan, who filed the suit against Amazon. Ferguson is expected to keep pursuing antitrust cases such as the one against Amazon, but he may be less inclined to embrace some of the more novel legal theories and approaches pursued under Khan’s leadership.

In filings in advance of the hearing, the FTC and Amazon laid out their respective positions on the key issues — including the competitive landscape, Amazon’s market power, and the company’s business practices.

Relevant markets: The FTC contends there are two relevant markets where Amazon has monopoly power: the “Online Superstore Market” for consumers, and the “Online Marketplace Services Market” for third-party sellers.

Whether or not the judge accepts these definitions will ultimately be key to the FTC’s case, because their relatively narrow scope is what makes it feasible for the agency to demonstrate Amazon’s market power.

Amazon argues for a much broader definition of the relevant markets, including online and brick-and-mortar retailers such as Walmart, Target, Nordstrom, Macy’s, Kohl’s, Kroger, Costco, Walgreens, Best Buy, and Wayfair, as well as local shops.

The company argues that the FTC’s definition of “online superstores” doesn’t make sense, because consumers regularly purchase different products from various retailers and channels, depending on the situation.

Monopoly power: The FTC alleges that Amazon has monopoly power in the defined markets due to the company’s large market share and significant barriers to entry and expansion by competitors.

As evidence of this power, it points to Amazon’s alleged ability to raise seller fees without losing sellers, and its approach to advertising on Amazon.com, which the agency argues has degraded search result quality.

Amazon contends that it does not possess monopoly power, crediting its success to its long-term innovation and ability to compete, and its focus on customer satisfaction and low prices.

The company points to the successful entry and growth of online retailers like Temu and Shein, as well as the expansion of established retailers’ online presence, as evidence of low barriers to entry and expansion. It also cites its investments in innovation as inconsistent with the behavior of a monopolist resting on its laurels.

Amazon’s conduct: The FTC describes Amazon’s practices as “anticompetitive” or “exclusionary” conduct that harms competition. It alleges that Amazon’s tactics prevent rivals from gaining the necessary scope to compete effectively, citing the impact on price, selection, and quality.

Amazon says its practices reflect “competition on the merits” that ultimately improve its product and services, and benefit consumers.

“A vigorous competitive process naturally leads more efficient companies — those that provide consumers with what they want, at prices they like — to succeed where others may not,” the company writes in its filing. “The antitrust laws do not prohibit such competition and such success; to the contrary, they encourage it.”

Amazon and its wide network of third-party retail partners could be disrupted by President Trump’s additional tariffs on goods from China.

Just how much, though, is unclear.

The new 10% tariff on Chinese goods went into effect this week, following a separate 10% hike last month.

A report from analysts at Morgan Stanley last month said Amazon’s first-party business has the highest exposure to China tariffs among e-commerce companies the firm tracks, including eBay, Chewy, and Etsy. The firm estimates that about 25% of the cost of goods sold directly by Amazon come from China.

If tariffs drive up costs, Amazon must decide whether to absorb those costs or pass them on to consumers.

Scott Devitt, an equity research analyst at Wedbush, said he doesn’t think Amazon is uniquely exposed to the tariffs given its ability to find merchandise from outside of China.

“Tariffs in general aren’t great for retail but Amazon is more nimble than many peers to be able to adjust,” he told GeekWire this week.

Amazon’s third-party sellers also face challenges with the tariff increases.

Saul Wolhendler, CEO of toy maker Flybar, which sells on Amazon, criticized the tariffs in a LinkedIn post on Wednesday, writing that retailers are backing out of orders ready to ship.

“When you announced a 10% tariff, we scrambled. We pushed back on factories, negotiated concessions, and worked with retailers,” Wolhendler wrote. “But then, without warning, you raised it to 20%. How can any company absorb a 20% cost increase? Most consumer product businesses don’t even have a 20% EBITDA margin.”

More than 60% of Amazon’s e-commerce sales come from third-party sellers — many of whom source products from China.

Devitt said those merchants also have similar flexibility to source outside of China and avoid the new tariff hike.

Trump also planned to eliminate a “de minimis” rule that exempted international shipments valued at $800 or less from U.S. tariffs, but paused the repeal last month.

Keeping the rule in place could benefit Amazon’s China-based competitors such as Shein and Temu — discount online shopping platforms that ship directly to consumers, bypassing traditional bulk shipments to warehouses. Both companies are gaining U.S. e-commerce market share.

Prices of consumer goods are expected to rise with the new tariffs on China, along with Mexico and Canada. That’s on top of U.S. consumer sentiment dropping to a 7-month low in February.

In response, China this week imposed tariffs on American food imports.

Amazon did not respond to an inquiry from GeekWire about impacts to its business from tariffs.

Trent Green, the CEO of Amazon’s primary healthcare company, One Medical, is leaving to take a job as CEO of publicly traded National Research Corp., which does business as NRC Health. 

Amazon informed One Medical employees of the news in an email Tuesday afternoon from Neil Lindsay, senior vice president of Amazon Health Services, which was obtained by GeekWire. 

Green, 53, was named CEO of One Medical in September 2023, about six months after Amazon closed its $3.9 billion acquisition of the company. He was One Medical’s COO before that.

His new role at NRC Health is expected to allow him to be closer to family. Green grew up in Nebraska, where the company is based.

Green’s last day at Amazon will be April 4, according to the message to employees.

Amazon has not yet named his successor. One Medical employees can expect an update in the coming weeks, Lindsay wrote in the email. Most of Green’s direct reports will report to Lindsay in the meantime.

“After nearly three years with Amazon One Medical, CEO Trent Green has decided to leave the company,” an Amazon spokesperson said in a statement. “We are grateful to Trent for his many contributions and wish him well on his next endeavor.”

As CEO, Green oversaw One Medical’s geographic expansion, the launch of the One Medical benefit for Prime members, and One Medical’s integration into Amazon Health Services, which includes prescription delivery and other healthcare services.

National Research Corp. reported Green’s appointment as its new CEO in a regulatory filing, noting that its current CEO, Mike Hays, will transition to the role of chairman when Green takes over as CEO.

Green is a 25-year healthcare veteran who was SVP and COO at Legacy Health in Portland, Ore., before becoming COO of One Medical in 2022. As noted in an NRC Health news release, Green was named to the TIME100 Most Influential People in Health and ranked #13 on Modern Healthcare’s Top 100 Healthcare Executives list.

“Why do you want to own this paper anymore? And do you love it as much as I do?”

That’s what journalist and entrepreneur Kara Swisher would ask Amazon founder Jeff Bezos about the newspaper he owns, The Washington Post, she explains at the conclusion of a new episode of her podcast, “On with Kara Swisher.”

The episode features Swisher and guests discussing the paper’s storied history, questioning Bezos’ motives as its owner, and contemplating what it would take to “save” the paper from him, as the episode’s title puts it.

The backdrop: Swisher’s previously stated desire to assemble a bid to purchase the publication (where she got her start); recent moves by Bezos aligning himself and his businesses with the interests of the Trump administration; and changes made by Bezos in the approach taken by the newspaper’s editorial/opinion section.

The latest: an opinion policy shift to focus on personal liberties and free markets.

Although it’s commonly accepted for a newspaper’s owner to define the direction of its editorial/option section, some of the guests assembled by Swisher for the episode expressed concern that the influence could eventually go further, despite past assurances by Bezos that he would never interfere with news coverage.

“When this big story happens, whatever it will be, that is really damaging to Trump, and Trump picks up the phone to Bezos, do any of us think that Bezos will say, ‘We’re hanging tough’? … I don’t think so,” said media icon Tina Brown, the former leader of publications including Vanity Fair, The New Yorker, and Newsweek.

Swisher said she reached out to Bezos via her investment banker, and through some of his friends, about purchasing the newspaper. She said she received an polite response from his investment arm, before they went silent.

GeekWire contacted Bezos Expeditions for comment on Swisher’s interest in the newspaper, and we’ll update this post if we hear back.

Bezos last year ended the newspaper’s tradition of endorsing candidates for president, spiking the Post’s endorsement of Kamala Harris, leading to a loss of more than 200,000 digital subscribers.

“I know, cry me a river about the death of journalism,” Swisher said in the conclusion to the podcast. “I’ve spent my career trying to innovate it, and at the end of the day, I don’t want to turn the Post into some charity. It has to hold its own as a business. But right now, it’s hemorrhaging money, talent and subscribers.”

Citing the reported loss of another 75,000 subscribers after opinion-page policy shift last week, Swisher said, “Bezos can afford to keep writing checks to stem the tide, but when he wants to stop doing that, I’m interested.”

Academy Awards host Conan O’Brien took a couple shots at Amazon and founder Jeff Bezos during the opening monologue of Sunday night’s ceremony.

O’Brien, the late-night TV vet and first-time Oscars host, discussed the recent news that Amazon MGM Studios has taken over creative control of the James Bond film franchise.

“They just announced the next James Bond,” O’Brien said, preparing to reveal what would have been a major scoop on Hollywood’s biggest night. Instead, O’Brien said, the new 007 is Amazon senior vice president of global affairs Steve Belsky. “Ladies love him,” O’Brien added as a fake corporate headshot appeared on screen.

Amazon’s real chief of global affairs is David Zapolsky, a 25-year Amazon vet.

O’Brien also shared what he said was footage of Bezos arriving on Oscars red carpet. The video showed an Amazon delivery driver dropping off a long box. “There he is! He seems undamaged,” O’Brien joked.

But when cameras cut to the audience and an empty seat, O’Brien wondered where Bezos was. More footage from outside the theater showed a “porch pirate” making off with the Bezos box.

Fast forward to the 9:18 mark of the video below for the start of the Amazon/Bezos jokes:

Amazon announced that it is giving $100 million to support affordable housing efforts in Bellevue, Wash.

The contribution is part of Amazon’s $3.6 billion Housing Equity Fund for affordable housing in cities where it has a large corporate presence: the Seattle region, Washington D.C., and Nashville, Tenn.

Amazon said the $100 million contribution will help “accelerate the production of affordable housing for low-to-moderate income families” in Bellevue, according to a press release. There is a focus on projects supported by the city and its transit-oriented sites.

The announcement Thursday coincided with a groundbreaking of a new affordable housing community in Bellevue’s Spring District developed by BRIDGE Housing, which Amazon is helping support.

Amazon has already helped create or preserve more than 1,400 homes in Bellevue. The company has committed $780 million for affordable housing in the Seattle area since 2021.

As Amazon and other tech companies have grown dramatically and attracted high-paid workers, some of the Seattle region’s leaders and residents have blamed the companies at least in part for an affordable housing shortage.

• Seattle is one of the priciest cities in the U.S., and housing costs are about 50% higher compared to other cities, according to Bureau of Economic Analysis data cited by the Seattle Times.
• The affordable housing crisis in King County is “deepening and unprecedented” with housing construction not keeping up with population growth, according to the Housing Development Consortium.

Amazon has quickly grown its footprint in downtown Bellevue after sparring with Seattle lawmakers in recent years over corporate tax initiatives. Bellevue is the focus of much of the company’s future growth in what it calls its Puget Sound headquarters region.

Amazon opposed a per-employee payroll “head tax” the Seattle City Council passed in 2018 (it was repealed), and soon later relocated thousands of employees to Bellevue, where it currently has 12,000 corporate workers and plans to eventually employ 25,000 in the city.

The announcement on Thursday comes just a few weeks after Seattle voters approved a new tax on big businesses such as Amazon that will fund a social housing developer. Amazon contributed $100,000 to an alternative ballot measure that would have used an existing payroll tax to fund the development of social housing in Seattle.

Amazon held an event in Seattle last year to announce an additional $1.4 billion to the Housing Equity Fund. Robinson and Seattle Mayor Bruce Harrell spoke at the event.

Last year, Amazon contributed $68 million to 120 Washington state community partners.

In 2023, Amazon was among the supporters of the Seattle Housing Levy, which was approved.

Amazon unveiled a prototype quantum processor with a novel architecture that promises to significantly reduce the resources required to unlock a future era in which ultra-powerful computers solve some of the world’s biggest problems.

The new chip, dubbed Ocelot, focuses on correcting errors from the start, using electrical oscillations to store data in a manner less susceptible to the disturbances and errors notorious for impeding full-fledged quantum computing.

Amazon says the approach could ultimately result in a functional quantum computer using as little as one-tenth the resources required for conventional quantum error-correction.

The news, announced Thursday morning, follows quantum chip unveilings by Microsoft last week and Google in December — each using a different architecture for qubits, the fundamental units of information in quantum computers.

Unlike classical binary computers that switch between 1s and 0s, qubits can exist in multiple states simultaneously, thanks to quantum mechanics. This is the technological trick that promises to unlock powerful new capabilities in areas such as chemistry, biochemistry, and materials science.

Standing in the way are environmental disturbances like vibrations, heat, and electromagnetic interference that easily disrupt the delicate quantum state of qubits, leading to mistakes in computation. This is why much of the work in the field is now focused on making qubits more stable and less prone to errors.

• Google is using standard qubits and scaling them up to massive levels to reduce errors with its Willow quantum chip.
• Microsoft says it has created a new form of qubit, called a topological qubit, that is more stable and less vulnerable to errors.
• Amazon’s approach uses built-in error protection from the oscillating effect, plus an additional layer of error correction on top of that.

“We’re entering a new era of quantum computing — an era of error-corrected hardware,” said Oskar Painter, head of quantum hardware for Amazon Web Services, in an interview with GeekWire this week.

Painter said he believes a practical quantum computer could still be a decade or more away, no matter the approach, but he expressed optimism that Amazon’s new chip could help accelerate the timeline.

The company’s approach is also detailed in a new paper in the journal Nature.

Amazon says Ocelot is the first quantum chip to implement “bosonic quantum error correction,” using special particles that protect quantum information from errors. Bosons can exist in a wider range of states, making error correction more efficient.

The company says this can reduce the cost of quantum error correction by up to 90%, a key step toward eventually reaching the scale needed to achieve the long-term potential of quantum computing. 

The qubit used Amazon is dubbed the “cat qubit,” after the famous Schrödinger’s cat thought experiment, in which a cat is simultaneously both alive and dead.

Ocelot remains a laboratory prototype, not yet available to customers. The company says more research and investment are needed to keep expanding the approach.

AWS currently offers a service called Amazon Braket, including specialized hardware, simulators, and software for quantum research and development.

Amazon’s quantum computing initiatives date back to its 2019 hiring of Painter and Fernando Brandão, Caltech physicists who were brought on to lead the company’s efforts to build its own quantum hardware.

Artificial intelligence and machine learning are turning into requirements for space operations, and Amazon Web Services is optimizing its products to reflect that view, according to the former Air Force major general who’s now in charge of AWS’ aerospace initiatives.

“AI, ML, generative AI have become table stakes for our future on-orbit systems and capabilities,” Clint Crosier, director of aerospace and satellite solutions at AWS, said today during Booz Allen Hamilton’s annual Space + AI Summit. “We have reached the limit of human capacity to digest petabytes and petabytes of data in real time and make any sort of intelligent decisions about them. We’ve culminated, so we must further embrace AI, ML and generative AI capabilities for the future.”

Crosier and other speakers at the summit, conducted at the headquarters of the Air & Space Forces Association in Virginia, pointed to the rapidly rising number of satellites in low Earth orbit as a major factor behind the need for more sophisticated AI tools. Over the past decade, that number has risen from about 1,300 to more than 10,000.

Merely keeping track of all those satellites is a challenging task — and it’s just as challenging to send all that data down to Earth for processing.

Enhancing the onboard capabilities of the satellites themselves — in effect, moving edge computing into orbit — is one of the strategies favored by AWS. In 2022, AWS and its commercial partners successfully tested a system that processed satellite image data in space. “We reduced overall bandwidth requirements by 42% while achieving 100% mission accomplishment,” Crosier said.

Crosier talked up the idea of turning cutting-edge innovations into commercial off-the-shelf components, or COTS. He said AWS and other players in the tech industry should always be looking at ways to optimize their systems to cope with the challenges of the space environment.

“We’re going to have to develop some purpose-built things optimized for allowing us to do advanced AI, ML and generative AI on orbit that may not exist today, but are going to be COTS tomorrow,” he said.

AWS is also working with NASA on a variety of projects aimed at harnessing the power of AI for space operations.

“NASA has already started porting many of their technical manuals into AWS’ generative AI capabilities, such that you can do a RAG chatbot right now in certain parts of NASA and say, ‘Give me all the specs on a human lander capability, and modify, you know, X or Y by mass or payload,'” Crosier said. “And the system will come back and provide you all that in recommendations.”

That capability could be a lifesaver for future missions to Mars, where communication challenges could make it difficult for astronauts to get real-time assistance from engineers back on Earth.

Crosier referred to the classic tale of Apollo 13 in 1970, when Mission Control scrambled to rescue the crew cope after an oxygen-tank explosion in space.

“Think about porting that into the future,” he said. “‘Houston, I have a problem’ becomes ‘Houston, I have a solution,’ because you’ve got this autonomous capability on the surface of Mars. Here’s all the in-situ resources I have. Here’s the storage and compute capability I have. Now go generate me three courses of action to solve the problem that I have. And gen-AI systems will bring back courses of action that will solve whatever challenges you’re facing.”

For years, NASA has been working on a similar project to harness AI for on-the-scene medical diagnosis in space.

“Sometimes somebody gets sick, for example, and depending on the orbit, it could take up to 40 minutes between you sending a signal from Mars until you get it back from Earth,” said Omar Hatamleh, who’s the chief AI officer at NASA’s Goddard Space Flight Center. “So we’re creating something called ‘Doctor in a Box’ as well. Imagine, if you have medical issues, you can have interactions with these, and these systems are trained specifically on medical domains.”

Hatamleh said other types of AI systems could be trained as robotic construction workers — to build habitats on Mars before the humans arrive, or to extract the raw materials necessary to support them while they’re there.

He acknowledged that giving AI agents a bigger role in space exploration could raise challenges worthy of a science-fiction tale. For example, suppose a robot goes out on an expedition with two human astronauts, and both of the humans are injured in an accident. “Which one does the humanoid robot choose to come back to the base?” Hatamleh asked.

He noted that science-fiction writer Isaac Asimov came up with what he called the Three Laws of Robotics, the first of which declared that “a robot may not injure a human being or, through inaction, allow a human being to come to harm.”

“But what if we have on-the-edge systems? Humanoid robots will be surgeons on the surface of a distant planet. … The fact that it’s doing an incision on a person — that’s harming a person, and that goes completely against the laws of Asimov,” Hatamleh said. “So, even the most fundamental, basic laws that we abided by for a long time need to be re-evaluated, reassessed for the next evolution of these technological advances.”

This report has been updated to characterize Crosier’s views on the tech industry’s approach to space applications more precisely.

Amazon unveiled Alexa+, a new service that integrates generative AI natively into the company’s longtime voice assistant — promising free-flowing conversations, plus the ability to learn user preferences over time to personalize the experience, and autonomously handle tasks such as travel arrangements and activity planning.

Alexa+ will be free to Amazon Prime members, and $19.99/month on its own. The company announced the news Wednesday morning in New York City.

“You can also use Alexa+ anywhere you want, from your favorite Echo devices and the Alexa mobile app to an all-new web browser experience,” Amazon says in a live blog from the launch. “Alexa+ will remember the context of your conversations so that you can seamlessly pick up where you left off as you go about your day.”

Alexa+ uses AI models from Amazon and its key AI partner, Anthropic.

The updates include a new user interface for Amazon’s Echo Show, with a screen that adapts based on the proximity of a user to the device, with a customized home screen that includes a “For You” pane and smart home controls.

Alexa+ features also include natural language controls, such as the ability to move music to different Alexa devices in the house. Amazon gave the example of saying, “play the music everywhere, but don’t wake the baby,” where Alexa+ would know not to play music on the device in the baby’s room.

Amazon says the new service “will start rolling out in the U.S. in the next few weeks, and subsequently in waves in the coming months starting with households with Echo Show 8, 10, 15, and 21.”

Alexa faces strong competition from Google Assistant, which is deeply integrated across the Android ecosystem and continues to refine its conversational AI capabilities. Apple’s Siri, though sometimes criticized for lagging behind, benefits from the massive iPhone user base and ongoing improvements in iOS.

Meanwhile, the company has been under pressure to make using Alexa more like interacting with OpenAI’s ChatGPT voice mode and other AI chatbots.

Amazon CEO Andy Jassy opened the event with an overview of the company’s AI strategy, including its own Nova artificial intelligence models.

For more than a year, Jassy has been saying that Amazon’s vision is to build “the world’s best personal assistant,” noting in the past that the advent of large language models would make that more feasible.

One challenge has been Alexa’s underlying infrastructure, relying on different services and apps depending on the nature of the user’s request, leading to a more disjointed experience. This has now changed, according to the company.

“The rearchitecture of all of Alexa has happened. We’re pumped about it,” said Panos Panay, Amazon’s senior vice president of Devices and Services, using his trademark term from his days leading the Microsoft Surface business, according to a live blog by The Verge from the New York City launch event.

Amazon describes the technical revamp in this post.

A prior generative AI capability for Alexa, previewed in September 2023, was called “Let’s Chat.” This was a special mode for open-ended conversations with Alexa, whereas the new capability is built into the broader experience. It was never released publicly, and the Alexa team has been taking a different approach since Panay took over.

The physical grocery landscape in Seattle is taking another turn in a space once connected to Amazon.

A former New Seasons Market in the Ballard neighborhood, which closed in 2019, is slated to become the location of a new H Mart, The Seattle Times reported, citing a new state liquor license application.

Permits connected Amazon to the location starting in early 2021 when filings showed the tech giant was doing electrical improvements on the space. In January 2023, a City of Seattle permit filing for a boiler or pressure vessel inspection used the name “Amazon Market” for the location for the first time.

The name raised suspicion that Amazon might have another grocery format in the works.

But over the last two years, the site has remained shuttered and Amazon did not add a new retail wrinkle to its ever-evolving physical grocery footprint. Amazon actually used the location to test grocery-related technology, and the company has now subleased it, according to a source familiar with the matter.

Amazon has been tweaking its grocery format for the last couple years, removing “Just Walk Out” cashierless technology from large grocery stores and closing some smaller Fresh stores. Amazon also closed a Fresh pickup location in Ballard in 2023, not far from the New Seasons space.

New Seasons opened the store, at 951 NW Ballard Way, in May 2018. Its Portland-based parent company announced the closure of the store in December 2019 as part of a larger merger of regional grocery chains.

H Mart is a national Asian grocery chain with locations across the Seattle area, including in the University District and downtown. The company started in Queens, N.Y., in 1982 and has grown to more than 97 stores across the U.S.

The location is part of what could be known as Grocery Alley on the east side of the Ballard neighborhood, with a Fred Meyer, PCC Natural Market and Trader Joes all within walking distance.

Will James Bond finally return to action? The prospect for a new film in the long-running spy thriller series increased dramatically on Thursday with the announcement that Amazon MGM Studios had reached a new 007 deal.

Amazon MGM and longtime Bond producers Michael Wilson and Barbara Broccoli announced that they’d formed a new joint venture as co-owners of the Bond intellectual property rights and franchise, with Amazon taking over creative control.

“Since his theatrical introduction over 60 years ago, James Bond has been one of the most iconic characters in filmed entertainment,” said Mike Hopkins, head of Prime Video and Amazon MGM Studios, in a news release. “We are honored to continue this treasured heritage, and look forward to ushering in the next phase of the legendary 007 for audiences around the world.”

Wilson said that he was stepping back from producing Bond films to focus on art and charitable projects and that he and Broccoli agreed it was time for Amazon MGM to “lead James Bond into the future.”

Amazon acquired MGM Studios in 2022 for $8.5 billion — its second-largest acquisition ever behind its $13.7 billion purchase of Whole Foods in 2017.

With the purchase came a catalog of more than 4,000 films and 17,000 TV shows that have collectively won more than 180 Academy Awards and 100 Emmys — and the rights to distribute all of the Bond films.

The Bond series features 25 films. The last, “No Time to Die,” was released in 2021 and starred Daniel Craig as 007 in his fifth and final turn in the role. The film earned $775 million. 

Beyond the question of when fans can expect a new Bond film, Amazon founder Jeff Bezos got straight to the point Thursday wondering who fans would want to see in the leading role.

“Who’d you pick as the next Bond,” Bezos asked on Instagram and X.

The popular consensus in the comments so far on Thursday seems to be around Henry Cavill, best known for his portrayal of Superman in the DC Extended Universe. Cavill is already attached to plans for a “Warhammer 40,000” TV series with Amazon MGM.

Actors Idris Elba, Cillian Murphy, Tom Hardy and others also got a shout-out for possible Bond status.

Bezos himself even got a nod — with an image that’ll probably be his new social media avatar any minute …

There will be no more apologies about Chime from Amazon employees to outsiders joining their meetings.

That ritual of logging on to an Amazon Chime meeting will become a thing of the past with the news that the company is ending support for its meeting and calling application one year from now, on Feb. 20, 2026.

It’s an example of Amazon paring back in an area where its impact was limited beyond its own virtual walls. In fact, the biggest impact will be inside Amazon: the company is shifting to Zoom as its default for virtual meetings.

“When we decide to retire a service or feature, it is typically because we’ve introduced something better or our partners offer a solution that is a good fit for our customers as well as our own employees,” an Amazon spokesperson said in a statement. “In Chime’s case, its use outside of Amazon was limited, and our partners offer great collaboration solutions, so we will lean into those.”

The move not impact the Chime SDK, which lets customers put communications features in their own apps, Amazon points out in its support update.

Meanwhile, Amazon is rolling out Microsoft 365 applications across the company, including Outlook, Word, Excel, PowerPoint, and SharePoint, in addition to Microsoft Teams, OneDrive, and Loop.

Amazon told employees in a memo, “Zoom is replacing Amazon Chime as the standard meeting application for Amazon internal meetings,” noting that Microsoft Teams can also be used “where full integration with M365 is needed.” Webex will be another option for meetings with customers who use the Cisco tool

Business Insider was first to report on Amazon’s shift to Zoom.

Zoom is a big Amazon customer, noting in its annual report that it uses Amazon Web Services and Oracle Cloud “for the hosting of certain critical aspects of our business, as well as Microsoft Azure for limited customer-specified managed services.”

Even though Amazon is rolling out Microsoft 365 applications, it makes sense for the company to go with Zoom as its internal default rather than Microsoft Teams, given Zoom’s status as a partner/customer, and Microsoft’s position as a rival to Amazon Web Services through its Azure cloud platform.

Amazon unveiled Chime in February 2017, building on its 2015 acquisition of Biba, a San Francisco-based company that makes chat, video and audio conferencing tools for businesses, as reported by GeekWire at the time.

Chime was basically adequate, based on our occasional experience using it to meet virtually with people inside Amazon, but it was missing many of the advanced features of other virtual meeting services.

The lack of widespread use also meant that it took the uninitiated a little longer to figure out how to join a meeting and change settings for audio and video, etc., which was the primary reason for those apologies.

Seattle voters are showing support for a new tax on big business that would fund a social housing developer.

More than 57% of voters said “yes” to the proposed tax, based on initial results posted Tuesday for Seattle’s special election.

The ordinance, known as Proposition 1A, would create a 5% tax on annual compensation above $1 million paid in Seattle to any employee. For example, if an employee earned $2 million, the company would pay $50,000 for the tax. The compensation includes base salary, stock, and bonuses.

The money would go toward a public development authority created to develop, own, and maintain social housing in Seattle. The tax would generate $50 million annually, according to supporters.

Proposition 1B, on the other hand, would allocate $10 million from an existing payroll tax to support the acquisition and development of social housing in Seattle. It would also place more limits on the new developer and give the city more oversight.

Amazon and Microsoft each put up $100,000 in support of the Proposition 1B campaign — the largest contributions by far. Other companies including T-Mobile, Weyerhauser, Alaska Airlines, and Russell Investments also donated.

Large tech companies have been criticized in Seattle for driving up housing costs as high-paying jobs exacerbate the economic divide.

Both Amazon and Microsoft have previously allocated millions to fund various affordable housing projects in the Seattle area.

“Rather than creating a new tax on jobs, we see value in maximizing the city’s current revenue streams to better support this effort,” an Amazon spokesperson said in a statement.

“Prop 1B will allow the city to address housing needs without raising taxes that would jeopardize jobs or the revitalization of downtown Seattle,” a Microsoft spokesperson said in a statement.

Let’s Build Social Housing, the campaign behind Proposition 1A, addressed the concern that the new tax will harm revitalization efforts in downtown Seattle, which has struggled to bounce back from the pandemic and remote work trends.

“One of the best ways to revitalize downtown is to have people living there,” it says in an FAQ page. “This is the singular neighborhood with the largest housing density allowances by far in all of Seattle. We should be building, and creating, social housing downtown to kick start revitalization.”

The latest tax on big tech

The existing payroll tax, also known as JumpStart, passed in 2020 and evolved out of a years-long battle over how the city should tax employers such as Amazon.

The issue came to a head in 2018 when the City Council approved a per-employee payroll “head tax” that targeted large local companies, in an effort to help the city raise tens of millions of dollars to pay for the effects of explosive growth driven by the tech boom.

Amazon, which strongly opposed the tax, followed up by pouring money into city council elections and relocating thousands of employees from Seattle to nearby Bellevue, which it now considers part of its “Puget Sound” headquarters.

JumpStart was designed to pay for affordable housing and homeless services, equitable economic development projects, and Green New Deal investments to help the city meet its environmental goals.

The tax has brought in more revenue than expected since it passed in 2020 and is now being used to plug the city’s budget deficit.

Social housing

The Seattle Social Housing Developer formed in 2023 after voters approved a ballot measure, but it was unclear how the effort would be funded.

The Seattle City Council, with support from the Chamber of Commerce and Mayor Bruce Harrell, introduced Proposition 1B last year as an alternative option to Proposition 1A, which qualified for the ballot after collecting enough signatures.

Social housing is designed to be publicly owned with rent caps based on income, and serve a wide range of households. It’s picked up traction in some cities around the globe including Singapore and Vienna.

“Once we acknowledge that we cannot meet our affordability needs at scale, we can look outside (and inside) our borders to how other countries are housing their citizens,” Let’s Build Social Housing writes in its FAQ.

The program in Seattle would allow people earning up to $126,000 annually to participate. The idea, in part, is to have higher-income renters help subsidize costs for lower-income tenants.

Proposition 1B puts a lower income cap on potential social housing renters.

The special election ballot included two questions related to social housing. The first asked voters if either of the propositions should be enacted into law. Initial results show more than 68% of voters saying “yes” to the first question.

The second question was: “Regardless of whether you voted yes or no above, if one of these measures is enacted, which one should it be?”

Final voting results won’t be confirmed for several days. We’ll update this post with the latest voting data. Update: Results from Feb. 12 show Proposition 1A garnering 58.2% of “yes” votes.

Amazon CEO Andy Jassy sounded more bullish than ever about the potential for artificial intelligence on the company’s earnings call this week.

“We think virtually every application that we know of today is going to be reinvented with AI inside of it, and with inference being a core building block, just like compute and storage and database,” Jassy said. He added that “AI represents, for sure, the biggest opportunity since cloud, and probably the biggest technology shift and opportunity in business since the internet.”

But as cloud giants Amazon, Microsoft, and Google spend record sums to build out their capacity for artificial intelligence models and services, the current realities of customer behavior underscore the risk in those bets.

The basics — storage, compute, etc. — still represent the bulk of demand.

“The big things, the valuable things, the things that drive the world, in a computing sense, are also blessedly the boring things,” says Corey Quinn, the chief cloud economist at The Duckbill Group, the host of the AWS Morning Brief and Screaming in the Cloud podcasts, and the curator of Last Week in AWS, a weekly newsletter.  

That’s not to say there isn’t a core role for AI in the future. But amid all the buzz about AI and the hand-wringing over DeepSeek, the vision expressed by the likes of Jassy and Microsoft CEO Satya Nadella doesn’t reflect the current state of the cloud for most customers, at least not at the scale all the hype would suggest.

That’s one of the takeaways on this episode of the GeekWire Podcast. Apart from his newsletter and podcasts, Quinn’s day job involves helping customers understand and manage their AWS bills. He uses those insights to provide a behind-the-scenes glimpse and a reality check on the state of the cloud market today.

RELATED LINKS

• Amazon on pace for $100B+ in yearly capex; Jassy expects cost efficiencies to drive AI demand
• Amazon’s quarterly profits soar to a record $20 billion, but cloud growth comes up short
• Platformonomics: Seattle-area angel investor Charles Fitzgerald (former Microsoft and VMware exec) breaks down Amazon’s capital expenditures

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Audio editing by Curt Milton.

Amazon scrubbed a reference to workforce diversity from its annual 10-K report this morning, reflecting a broader corporate retreat from diversity and inclusion practices amid changing political winds.

Under a section of the report titled “Human Capital,” the Seattle-area tech giant stated, “Our employees are critical to our mission of being Earth’s most customer-centric company” and that it “strives to be the Earth’s best employer.”

In last year’s report, the section continued, “As we strive to be Earth’s best employer, we focus on investment and innovation, inclusion and diversity, safety, and engagement to hire and develop the best talent.”

The disappearance of the clause lines up with other moves by the company to reframe its policies around diversity as President Trump and his administration are aggressively dismantling DEI efforts throughout the government and in federally supported programs.

CNBC spotted and reported on the change earlier today.

Asked to comment on the change, an Amazon spokesperson directed GeekWire to a paragraph addressing diversity, equity and inclusion on its policy positions webpage.

“We are committed to creating a diverse and inclusive company that helps us build the best range of products and services for our broad customer base,” it reads, in part.

In Trump’s executive order, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” he instructs agencies to identify up to nine large corporations, nonprofits, foundations, associations and/or universities for potential investigations. The organizations would be targeted in an effort to “deter DEI programs or principles (whether specifically denominated ‘DEI’ or otherwise) that constitute illegal discrimination or preferences.”

Corporations including Boeing, Meta, Walmart, Target and others have recently rolled back and in some cases publicly disavowed their diversity programs.

Amazon’s approach has been more diplomatic. In December, the company’s leadership shared news with employees that in regard to its DEI efforts, “we’ve been winding down outdated programs and materials, and we’re aiming to complete that by the end of 2024.”

The message came from Candi Castleberry, Amazon’s vice president of Inclusive eXperiences and Technology (IXT), who previously held the title of vice president of Global Diversity, Equity, & Inclusion.

In her message, Castleberry did emphasize that to serve customers worldwide, Amazon needed “millions of employees and partners that reflect our customers and communities. We strive to be representative of those customers and build a culture that’s inclusive for everyone.”

While the language and programming appears to be stepping back from diversity-focused efforts, it’s difficult to know how that’s playing out for its workforce.

Take, for example, Amazon CEO Andy Jassy’s actions this week. On Thursday, Jassy posed for a photo op with Amazon’s employee-led Black Employee Network (BEN) in celebration of the start of Black History Month.

Jassy posted the photos on LinkedIn, praising the group.

“We’re fortunate to have a tremendous team of builders and leaders who make Amazon stronger and help us innovate faster and better for all customers,” Jassy said. “Grateful to BEN and all Black leaders and visionaries whose work has and continues to shape our society and culture.”

His post elicited many comments of gratitude, including one from Angelina Howard, a manager with Amazon Web Services.

“It’s always a pleasure to have you at this annual celebration. It means so much when leaders don’t just say they care but show up and engage,” Howard wrote to Jassy. “Thank you for your continued support of BEN and for making time to connect with employees. Your commitment and intentionality truly make a difference!”

Amazon reported $26.3 billion in capital expenditures in the fourth quarter, and the company plans to keep spending at that pace in 2025, which would put the total at more than $100 billion for the year.

The “vast majority” will go toward building out capacity for artificial intelligence in Amazon Web Services, said Amazon CEO Andy Jassy during the company’s earnings conference call with analysts.

Asked about the AI cost efficiencies represented by DeepSeek’s widely followed advances, Jassy echoed the sentiments of other tech leaders in saying that he expects the trend to increase overall AI demand.

When the cost of a technology component like AI inference comes down, Jassy said, it doesn’t mean companies will spend less overall on technology. Instead, he asserted, they get excited about building new things that were previously cost-prohibitive, and end up spending more in total on technology.

“AI represents, for sure, the biggest opportunity since cloud, and probably the biggest technology shift and opportunity in business since the internet,” he said.

Amazon’s capital spending was about $78 billion for 2024. Amazon’s total capital spending also includes the buildout of its e-commerce fulfillment network and retail stores, which means it’s not directly comparable to Microsoft, Google and others.

Microsoft is spending $80 billion on capital expenditures this fiscal year, which ends in June; and Google expects to spend $75 billion for the calendar year.

For the fourth quarter, Amazon beat Wall Street’s overall expectations with $187.8 billion in net sales, up 10%. Quarterly profits surpassed $20 billion for the first time, up more than 88% from a year ago. 

However, Amazon Web Services growth was slightly lower than expected, with sales of $28.8 billion, an increase of just under 19%, compared with expectations of 19.3% in advance of the report.

Amazon beat Wall Street’s overall expectations with $187.8 billion in net sales, up 10%, and came in well ahead on the bottom line, with earnings of $1.86 per share, vs. expectations of $1.48 for the fourth quarter.

Quarterly profits surpassed $20 billion for the first time, up more than 88% from a year ago. The results for the quarter included the e-commerce giant’s sales from the 2024 holiday shopping season.

However, growth in the closely watched Amazon Web Services cloud unit was slightly lower than expected, with sales of $28.8 billion, an increase of just under 19%, compared with expectations of 19.3% in advance of the report.

That makes for a trend in the cloud industry. Amazon’s biggest rivals in the cloud, Microsoft Azure and Google Cloud, both posted revenue growth below Wall Street’s expectations in their most recent reports.

Although AWS sales ($28.8 billion) accounted for just 15% of Amazon’s total sales ($187.8), the cloud unit’s operating profits ($10.6 billion) continued to make a huge difference in the company’s profitability — representing more than 50% of Amazon’s overall operating profits of $21.2 billion for the quarter.

Amazon shares slipped more than 4% in after-hours trading.

Investors also appeared to be underwhelmed by Amazon’s overall guidance for the first quarter of 2025: net sales between $151 billion and $155.5 billion (up 5% to 9%) and operating income between $14 billion and $18 billion, vs. $15.3 billion in the first quarter of 2024.

Here are the top-line results from Amazon’s other major business units:

• Net sales in the company’s Online Stores business was $75.5 billion, up 7.1%.
• Third-party seller services sales were nearly $47.5 billion, up 9%.
• Revenue from advertising was $17.3 billion, up nearly 18%.
• Revenue from subscriptions, including Prime, was $11.5 billion, up 9.73%.
• Physical stores remain a small portion of Amazon’s business, with revenue of $5.6 billion for the quarter, up 8% year-over-year.

The company reported 1,556,000 full- and part-time employees as of Dec. 31, up 2% year-over-year. This number does not include contractors or temporary personnel hired for seasonal work.

FOLLOW-UP: Amazon on pace for $100B+ in yearly capex; Jassy expects cost efficiencies to drive AI demand

Amazon’s cloud growth rate has been increasing steadily in recent quarters, and investors are looking for the trend to continue when the company reports earnings Thursday for the December quarter and 2024 fiscal year.

Wall Street expects year-over-year growth of 19.3% in Amazon Web Services revenue, which would be the largest increase in two years, according to LSEG data reported by Reuters.

Amazon Web Services remains a major financial engine for the larger company.

• AWS revenue in the third quarter was a record $27.45 billion, reaching an annual revenue run rate of nearly $110 billion.
• AWS operating profits in the third quarter topped $10.4 billion, representing about 60% of Amazon’s companywide operating profits.

Overall, analysts expect Amazon to post quarterly revenue of $187.23 billion for the December quarter, up more than 10% from a year ago, with earnings of $1.48 per share, an increase of 48% over the same period.

Amazon’s report comes after Microsoft Azure and Google Cloud both posted revenue growth below Wall Street’s expectations. Both companies are boosting capital expenditures significantly to increase capacity for what they foresee as a boom in AI demand — Microsoft to $80 billion this fiscal year, and Google parent Alphabet to $75 billion.

As with Microsoft and Google, key questions for Amazon will include the impact of new AI efficiencies on future demand for the cloud computing needed to train and refine AI models, as demonstrated by China’s DeepSeek.

Meanwhile, in Amazon’s core e-commerce business, the company and third-party sellers faces the potential for higher supply chain costs due to new tariffs on goods manufactured and imported from China.

Amazon’s online stores segment generated $61.4 billion in the third quarter, or about 38.6% of its overall net sales of $158.9 billion. The fourth-quarter results will include sales from the critical holiday shopping season.

Check back Thursday afternoon for Amazon’s full results.

This week on the GeekWire Podcast, we dive deep into DeepSeek, the AI project shaking up the tech world, to better understand the underlying technical advances and the long-term implications for the industry.

Joining us is Bill Howe, an associate professor at the University of Washington’s Information School and the co-founding director of the UW Center for Responsible AI Systems and Experiences, among other UW roles.

DeepSeek, an open-source AI model from a Chinese company, grabbed attention for its ability to rival the performance of top AI reasoning models with a stripped-down technique for post-training.

These capabilities were previously believed to require much more complex and resource-intensive methods. In that way, it illustrates the potential for more efficient ways of creating powerful AI models.

Overall, Howe said, the trend promises to help democratize access to AI models of varying sizes.

“That will accelerate the move into an agentic era where we have agents working on our behalf, scurrying around,” Howe predicted. “There’s a lot of downsides to that, potentially, but there’s also potentially a lot of upsides. But I think you’ll see this year that come to fruition.”

Related stories:

• DeepSeek’s new model shows that AI expertise might matter more than compute in 2025
• Allen Institute for AI challenges DeepSeek on key benchmarks with big new open-source AI model
• Microsoft CEO says AI use will ‘skyrocket’ with more efficiency amid craze over DeepSeek
• Who will win in AI? DeepSeek’s breakthrough stirs questions around value capture

My colleague John Cook and I open the show from the Microsoft campus in Redmond, after getting an inside look at the company’s history for an upcoming installment in our Microsoft @ 50 series.

John marvels at the size of the campus redevelopment, which is still under way. Listen to the end to hear our first-hand experience with Microsoft’s vast parking garage when we attempt to leave.

Also on our agenda this week: Amazon’s lawsuit against Washington state over a Washington Post public records request related to Amazon’s Project Kuiper satellite venture, and what it says about the conflicts inherent to Amazon founder Jeff Bezos’ ownership of the paper.

Related story: Bezos vs. Bezos: Amazon sues WA state over Washington Post request for Kuiper records

Audio editing by Curt Milton.

Amazon laid off employees in its communications and sustainability organizations on Wednesday in the latest round of cuts at the tech giant.

The company did not share how many roles were eliminated. Bloomberg reported that dozens of corporate jobs were impacted by the cuts.

“Following a recent review, we’re making some changes to the Communications & Corporate Responsibility organization to help us move faster, increase ownership, strengthen our culture, and bring teams closer to customers,” Amazon spokesperson Brad Glasser said in a statement to GeekWire. “As part of these changes, we’ve made the difficult decision to eliminate a small number of roles.”

CNBC reported that Drew Herdener, who oversees the affected units, wrote to employees that the company “identified some roles that were too narrowly scoped or that introduced unnecessary layers, where we couldn’t solve the challenge by flattening the structure or shifting workloads.”

Glasser said that Amazon is committed to supporting laid off employees through the transition.

For employees in the U.S., Amazon will provide pay and benefits for at least 60 days as well as a package that includes a severance payment, transitional health insurance benefits, and job placement support.

Earlier this month, Amazon laid off employees in its North America Stores division, impacting roughly 200 employees across the U.S.

In a bid to curb costs, Amazon let go 27,000 corporate workers in two major rounds of layoffs in 2023. Amazon Web Services slashed hundreds of jobs last April.

The company that Jeff Bezos founded has gone to court to keep the newspaper he owns from finding out too much about the inner workings of its business.

Amazon is suing Washington state to limit the release of public records to The Washington Post from a series of state Department of Labor and Industries investigations of an Amazon Project Kuiper satellite facility in the Seattle area.

The lawsuit, filed this week in King County Superior Court in Seattle, says the newspaper on Nov. 26 requested “copies of inspection records, investigation notes, interview notes, complaints,” and other documents related to four investigations at the Redmond, Wash., facility between August and October 2024.

It’s not an unusual move by the company, and in some ways it’s a legal technicality. Amazon says it’s not seeking to block the records release entirely, but rather seeking to protect from public disclosure certain records that contain proprietary information and trade secrets about the company’s satellite internet operations.

The lawsuit cites a prior situation in which Amazon and the Department of Labor and Industries similarly worked through the court to respond to a Seattle Times public records request without disclosing proprietary information.

The twist in this latest complaint is the common thread between the entity requesting the records and the one seeking to limit their release. Bezos, the Amazon founder, has owned The Washington Post since 2013.

The Washington Post isn’t named as a defendant in the lawsuit. But the public records request further underscores the independence of the publication’s reporters in covering the business dealings of its owner.

In this case, Amazon says in the suit, the state provided Amazon with a link to the records that it proposed releasing to the newspaper to give the company a chance to review them and go to court as it deemed necessary.

“Amazon does not seek to prevent disclosure of all of the requested records,” the suit says. “Rather, Amazon seeks to protect a subset of records that contain trade secrets,” as defined by law. “The release of this proprietary information would irreparably harm Amazon in such a way that monetary damages would be inadequate to make Amazon whole.”

The lawsuit does not provide details about the specific nature or outcome of the state investigations. Amazon and Washington state have been involved in a series of past disputes related to inspections of the company’s warehouses.

Amazon’s Project Kuiper is a broadband satellite network under development by the company, aiming to provide high-speed internet service in competition with SpaceX’s Starlink. Under the terms of Amazon’s Federal Communications Commission license, half of its 3,232 satellites are to be launched by mid-2026.

GeekWire has contacted Amazon and the Post for comment on the lawsuit.

Read the full text of the complaint below.

Amazon v. WA state L&I re: Washington Post request by GeekWire on Scribd

Amazon is adding some big items to the Whole Foods CEO’s cart.

Jason Buechel will expand his role to oversee Amazon’s Worldwide Grocery Stores business, including Amazon Go convenience stores and Amazon Fresh physical and online stores, while also continuing to serve as Whole Foods Market CEO.

The move reflects Amazon’s ongoing efforts to integrate elements of its homegrown grocery operations with Whole Foods, while also attempting to maintain the unique identity of the upscale chain. Amazon acquired Whole Foods for $13.7 billion in 2017. 

Reporting to Buechel under the new leadership structure will be Amazon Fresh VP Claire Peters; and Worldwide Grocery Product and Technology VP Anand Varadarajan, according to an email from Doug Herrington, Amazon Worldwide Stores CEO, announcing Buechel’s expanded role in an email Monday afternoon.

As Amazon’s new Worldwide Grocery Stores vice president, Buechel succeeds Tony Hoggett, who left his role as senior vice president in November after less than two years. Hoggett took a new role at Wonder, the new delivery and takeout chain led by e-commerce entrepreneur Marc Lore, formerly of Amazon and Walmart.

Amazon has been trying for many years to come up with a successful formula in grocery, with mixed results. Hoggett’s tenure saw the company introduce new store formats, close some stores, pause and restart expansion, and shift away from its “Just Walk Out” checkout-free technology in its large format Amazon Fresh stores.

Buechel has been with Whole Foods since 2013, serving as CIO and COO before becoming CEO in September 2022. 

“In his time as [Whole Foods] CEO, Jason has unlocked our ability to make high-quality natural and organic groceries more affordable and accessible to customers, helping WFM achieve record sales growth and expand to over 535 locations,” Herrington wrote in his email.

Whole Foods has experienced sales growth of more than 40% since it was acquired by Amazon, according to data provided Monday by an Amazon spokesperson. 

In April 2024, the company launched a $9.99/month grocery subscription that gives Amazon Prime members unlimited grocery delivery from Whole Foods, Amazon Fresh, and local retailers on orders of more than $35. 

Herrington said in his email Monday that the new subscription has been well-received by customers. Amazon has not publicly disclosed sales or subscriber numbers, but a spokesperson said a recent survey of subscribers indicated that more than 85% were very or extremely satisfied with the delivery benefit.

“Since creating a single WW Grocery Stores organization in 2022, we have made notable progress in our vision to make grocery shopping simpler, faster, and more affordable for customers,” Herrington wrote. “We’ve taken steps to integrate our huge grocery selection across our broader logistics network, and create a more seamless experience for customers, especially Prime members. This work will continue under Jason’s leadership.”

In October 2024, Amazon started testing a new grocery concept combining a small-format Amazon store and Whole Foods under one roof in Chicago, aiming to let customers to shop natural and organic products at Whole Foods and a broader assortment from Amazon in one trip.

Amazon is also developing its first automated micro-fulfillment center within a Whole Foods Market store in Plymouth Meeting, Penn., with grocery products from Whole Foods, Amazon Fresh, and essential items from Amazon.com.

Another experiment, in Phoenix, lets online customers shop for grocery items and Amazon products alongside one another and have them delivered together.

Amazon’s Just Walk Out checkout-free approach remains a core feature at Amazon Go stores and third-party retailers that use the company’s technology.

Amazon confirmed that it voluntarily paused its Prime Air drone deliveries in Texas and Arizona, but downplayed the role of a reported crash of two drones in December at an Oregon testing facility as a factor in the decision.

“We’re currently in the process of making software changes to the drone and will be voluntarily pausing our commercial operations on Friday, Jan. 17,” said Sam Stephenson, an Amazon spokesperson, in a statement to GeekWire. “Our services will resume once these updates are completed and approved by the FAA.”

Stephenson added, “The incident that occurred at our Pendleton, OR facility in Dec. 2024 is not the primary reason for our voluntary operational pause. Prime Air continued to deliver to customers safely and within federal compliance until we voluntarily paused the service on Jan. 17.”

Bloomberg reported Friday that two of Amazon’s MK30 drones crashed during flights at the company’s Pendleton, Ore., testing facility, and one caught fire on the ground. “The company later discovered a software issue was to blame, related to the light rain the aircraft were flying through at the time,” Bloomberg reported. 

Amazon debuted the MK30 drones in November in the West Valley Phoenix Metro Area of Arizona and College Station, Texas, the two parts of the U.S. where it’s currently making drone deliveries to customers.

“These incidents occurred at our private and closed testing facility, where the purpose of these tests is to push our aircraft past their limits – it would be irresponsible not to do that,” Stephenson said.

He added, “We expect incidents like these to occur in those tests, and they help us continue to improve the safety of our operations. Our commercial operations with the MK30 drone have been conducted safely and in compliance with all FAA regulations and requirements.”

Stephenson described safety and compliance as a top priority, and said the drone is “designed to safely respond to unknown events in a known way, and the overall architecture of the drone has performed as expected.”

The operational pause is the latest twist in the company’s longstanding effort to deliver packages via drone, an initiative unveiled more than a decade ago by Amazon founder Jeff Bezos in a segment on “60 Minutes.”

The company said in May that it would expand the range of its drone deliveries and the footprint of its drone network across the U.S. after the FAA granted permission to operate its delivery drones beyond the visual line of sight of drone operators.

This week on the GeekWire Podcast: An inside look at Amazon’s classic process for strategic thinking and decision-making, with a former Amazon product and technology director who has written a new book about the documents used by the company to determine its direction. What can others learn from its approach?

Plus, we discuss this moment in Amazon’s history, as employees return to the office five days a week; and check in on the state of the Seattle startup world.

Our guest is Marcelo Calbucci, a serial entrepreneur and longtime Seattle startup community leader who has worked for both Amazon and Microsoft. His new book is The PRFAQ Framework: Adapting Amazon’s Innovation Framework to Work for You. It’s available in hardback and Kindle.

Calbucci has also created a giveaway contest for GeekWire readers and listeners. Enter here for a chance to win a copy of the book.

Listen below, and subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen. Continue reading for highlights.

PRFAQ stands for Press Release and Frequently Asked Questions. The idea is to imagine the future, and work backwards from there. It’s also known as a six-pager.

In the book, Calbucci offers these five principles for the PRFAQ:

1. Customer-centric: It starts from the customer, and it captures their needs, pain points, or desires. It captures how customers are being (under)served today, who they are, and what matters to them.

2. Aspirational: It’s an aspirational vision that is feasible, viable, usable, and valuable.

3. Clear, concise, and coherent: It presents the project in its best possible light. It’s easy to understand by the people involved in the project, and it’s logical.

4. Truth-seeking: It is a mechanism to learn and discover. It’s not a way to manipulate opinions or force ideas onto people. It evolves at each round of review, improving its accuracy.

5. A strategic decision-making tool: It’s a tool to decide if the team should pursue a project, why, and when.

“I think the biggest value in the PRFAQ is not the document itself,” Calbucci said. “It’s the process of creating the document and everyone that gets involved in that.”

Although he saw the value of the process at Amazon, he noticed that it wasn’t widely adopted outside the company. He learned that when people tried to use the PRFAQ process at other companies, they faced resistance because the people involved didn’t understand how to write or use it effectively.

That’s where the book comes in. The idea was to provide a resource for understanding and implementing the PRFAQ process, to help not only the people creating the PRFAQs, but also others participating in the process.

What about AI? While artificial intelligence can be valuable, in general, for research and basic summarization, etc., the PRFAQ demonstrates the value of the human process of creation and collaboration.

“The problem with generative AI is that it takes away from your thinking,” Calbucci said. “When AI is doing the writing for you, then you’re not doing the reasoning and the thinking, and that doesn’t help you find the truth in an opportunity, or a product, or a business.”

Listen to the conversation above, and see theprfaq.com for more on the book.

Audio editing and production by Curt Milton.