Amazon's cloud boss compares generative AI hype to the dotcom bubble

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As CEO of AWS, Amazon's flagship cloud computing platform, Adam Selipsky is one of the most powerful people in computing at a time when the industry is racing to adopt Generative Artificial Intelligence. Despite being a fan of the technology, he also has a warning for anyone trying to understand this moment: Some of the AI ​​companies at the center of the storm are massively overhyped.

Selipsky compares the generative AI rush to the early days of the dotcom bubble, when expectations spread that the Internet would transform many industries almost overnight. Although in the long term the Internet was truly transformative, in the short term many projects went to waste, and many Silicon Valley companies closed down.

“If you go back to 1997 and ask, 'Was the Internet under-promoted or over-promoted?' I would argue that it was under-publicized,” says Selipsky, who spoke to WIRED during a conference at Harvard Business School on Feb. 4. “But if you then ask, 'Are the companies that at the time Was it leading, dramatically exaggerated?' Yes they were.” Selipsky did not name the companies he has in mind. The most prominent so far in generative AI include Amazon's cloud rival Microsoft and its partner and ChatGPAT developer OpenAI.

Selipsky says companies that are looking for ways to implement generic AI in their business or industry need to be careful not to be misled by the hype. “Many companies and organizations are struggling to understand, 'Out of the hundred pilots or proof-of-concepts I have, which one do I take into production?'” he says. “And they're starting to see that it could be very expensive once it goes into production.” Implications? Many of the generic AI projects hastily launched in the past year may not survive in the long run. The technology can be expensive to deploy due to the many high-powered computer chips required for generative AI projects.

Amazon is not widely seen as a leader in the generative AI boom that was kicked off by OpenAI's surprise hit ChatGPIT — perhaps giving Selipsky reason to overestimate its impact. But despite the problems, he says Amazon is looking at a long-term technological turnaround. “We believe that generative AI will be transformative, changing the way almost every application in the world works, and ultimately changing the way people work,” he says.

Company executives and boards in all types of industries are currently under pressure to explore and experiment with generative AI. Investors, academic studies, and industry reports have predicted major disruption for businesses, resulting in trillions of dollars of lost revenue in the future.

Also, although generic AI has clearly boosted the businesses of AI providers like OpenAI and some hardware companies like Nvidia, the benefits of generic AI for business applications are less clear. Problems such as algorithmic bias and hallucinations are affecting generic AI deployment, and disputes over copyrighted data fed to AI models have also created legal jeopardy over some applications of the technology.

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Selipsky first joined AWS in 2005 as a marketing executive, but left in 2016 to become CEO of analytics company Tableau, which was later sold to Salesforce. He was hired back to lead AWS in 2021 by Andy Jassy, ​​who had recently vacated that position to replace Jeff Bezos as Amazon CEO, and was originally his first Selipsky was hired for the tenure.

Although Amazon has been the clear market leader in cloud computing for years, its primary rival, Microsoft, has significant support in the competition for AI, being the primary supporter of ChatGate maker OpenAI. Amazon's other main cloud rival, Google, long considered a leader in AI development, has gone full steam ahead on generative AI, aggressively developing a rival to ChatGPT and incorporating the technology into many of its services. Including in.