AWS, which hosts two of the largest digital public infrastructures (DPI) to be built out of India – document storage network DigiLocker and vaccination platform Cowin— is now seeing “real appetite and potential for India-based organisations” to establish these applications in other parts of the world, according to the 54 year-old who took charge of AWS in March 2021, after then CEO Andy Jassy succeeded Jeff Bezos as the CEO and president of Amazon.
India remains a “bright spot” amid a period of unprecedented global uncertainty, where businesses are increasingly turning conservative, according to Selipsky. There is significant scope for greater adoption of cloud computing by both Indian businesses and the government, he told ET’s Romita Majumdar and Surabhi Agarwal in a virtual interview. Noting the rising prevalence of local storage of digital data, Selipsky pointed to AWS’s plans to take on Microsoft’s ChatGPT as well as Google’s Bard with its own generative AI platform.
What are AWS’ expansion plans for India?
We’ve already invested $3.7 billion in India between 2016 and 2022. A lot of that was in our first big infrastructure region in Mumbai. We now plan to invest an additional $12.7 billion in our local cloud infrastructure in India by the year 2030. And so that cumulatively is $16.4 billion and we’re very pleased and excited by that. It’ll add over $23 billion to the Indian GDP by 2030. That’s substantial and we’re really excited. A lot of that investment will be in our new Hyderabad infrastructure region that we launched last year, as well as growing the Mumbai infrastructure region that was launched in 2016.
Is the Indian market looking like a bright spot when Europe and US markets are slowing?India has absolutely remained an incredibly energised, high growth market. We see digital innovation proceeding really rapidly in India. I was just incredibly impressed by the amount of activity I saw when I was there (in April). I think it’s exciting times for India’s economy. I know the government’s played a role in setting a lot of those wheels in motion. They’re trying to build a trillion dollar digital economy by 2025, on the way to a $5 trillion economy over the next few years. And embracing cloud technology is critical for India to realise those ambitions.
Worldwide, only a small minority of IT spend has moved to the cloud. And that includes India, we’re still at the beginning at the early stages of adoption amongst enterprises and public sector customers. And you look at economic downturns of the past and companies in the 2008 timeframe like Uber and Airbnb, who got going building on AWS in those time frames – those are the worldwide leaders now and I expect more of this to come out of this economic crisis. And I suspect a lot of those will come from India.
Can you give us details of how you will direct your proposed $ 12.7 billion investment in India? Does it include the $4.4 billion which was announced last year for the Hyderabad region?
Yes. It will be a variety of investments as business in India continues to grow rapidly. We’re just seeing so much demand from many different sectors from Indian enterprises driven with our conjunction with our great partners. And more and more government workloads as we participate with the National Digital pillars. I expect and hope those pillars will grow rapidly. It will be about growing capacity in the Mumbai and Hyderabad infrastructure regions. We certainly anticipate putting other infrastructure in time in India, as we build out things like smaller facilities, local zones, which can be in other cities sort of attached to our larger infrastructure regions. We will also continue to make renewable energy investments in India and those will be sizable.
What do you think of the digital public goods being built out of India? Are these solutions that you can offer to global clients?
We’re working with all the digital pillars of the country, and many of them are being built on AWS, the DigiLocker is built on AWS, the Cowin COVID solution was built entirely on AWS. And we’re very privileged to be part of that solution that obviously was so important for the country. The appetite, the willingness and the ability to export a lot of innovative solutions that are being built in India (is amazing). And you can see their applicability worldwide for the public sector and the private sector. So, I think across the private and the public sector, (there is) real appetite and potential for India-based organisations to be selling or setting up these applications in other parts of the world. We make that possible because we offer infrastructure worldwide.
How far has the slowdown in tech investments impacted cloud growth? How do you expect 2024 to turn out?
Well, there’s no doubt that it’s been a crazy few years, with the pandemic starting in 2020. And then with the war in Ukraine, just a little bit over a year ago. The economic uncertainty that drove the changes in energy prices, change in interest rates and inflation, it’s been a very unusual time. A lot of people have told me, they’ve seen better times, they’ve seen worse times, but they’ve never seen more uncertain times. And I think a lot of companies have reacted to that uncertainty by saying, “hey, let’s just be careful, let’s be measured in our spending, let’s make sure we’re being really efficient in everything we do”.
And one of the real benefits of the cloud is the ability to both grow and shrink your infrastructure rapidly. So, we’ve had a number of customers who have done what I’ll call belt tightening. And this is no surprise. Amazon itself, of course, has been doing some of that. This economic cycle isn’t going to last forever. And when companies come out of it with growth, the ones who are investing now, who are innovating are going to be the winners.
How do you look at the data sovereignty concerns across the globe and how far does it impact cloud services?
There’s absolutely heightened interest in data sovereignty. Countries want to specify how data will be handled and what data should reside where and what should stay onshore, essentially. But then a second trend, which continues unabated is the need for worldwide cloud infrastructure. For example, we have US and European based companies doing large business in India, and they need AWS in India, to serve Indian customers and vice versa. Now, the good news, for us and for our customers is that AWS was designed from day one, to be regionalised. So, if you put data into Mumbai, you’re only putting into Mumbai, if you put it into Tokyo, you’re only putting it into Tokyo, if it’s going to move, you’re going to move it by issuing another command. But we believe that countries will have the right to say how they want data to be treated in their country. And we’ve been very active partners and have the leading edge capabilities around that.
How is AWS looking to compete with Microsoft and Google on the generative AI front?
There’s no doubt that generative AI is incredibly important and exciting. We think that it will impact in fundamental ways, almost every application that people interact with. And we are investing very substantially in generative AI across AWS, and divisions within Amazon.
It is an incredibly expensive job to build large language models. And a lot of customers are coming to us saying, this just isn’t economical, and how can we afford that investment. At the end of the day, it’ll probably be a small number of companies who will build their own large language models. Most of our customers will want to consume models that other people have built. Our goal is to democratise generative AI by providing choice in AI models like the Amazon Bedrock which is the managed service for accessing and running many different foundation models.
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