Decoder with Nilay Patel
00:31:21 · Nilay Patel, Joey Brookhart
[00:31:21] S2: You mentioned this earlier. This is the marketing channel where Anthropic gets rev share. [00:31:24] S4: Right, and if you're AWS and you're saying, oh, I'm running Anthropic compute for, let's say, million per megawatt, but now I'm getting 16% of 65 a megawatt plus the compute cost as well, we're seeing margins at all the clouds go up right now. Part of it is CPU utilization is going up because of all the coding and then some of the RL side, but these token as a service businesses, as we call them, so AWS, Bedrock, Microsoft Foundry, Google Gemini Agent Enterprise Platform, formerly Vertex, are actually massively increasing kind of the margins on AI at these clouds. So they're benefiting as well, and shareholders are giving them credit for this recently. I think in Q2, both Azure and AWS had, you know, extremely, extremely strong quarters on the back, AWS specifically on the back of Anthropic's growth on Bedrock. [00:32:13] S2: Do you think that will keep Amazon from ever wanting to train its own frontier models? They're doing a good job of letting AWS be the infrastructure for everybody else, But they're one of the only big tech companies that hasn't felt the insecurity of not having their own models.
00:32:13 · Nilay Patel, Joey Brookhart
[00:32:13] S2: Do you think that will keep Amazon from ever wanting to train its own frontier models? They're doing a good job of letting AWS be the infrastructure for everybody else, But they're one of the only big tech companies that hasn't felt the insecurity of not having their own models. [00:32:26] S4: It's interesting, I think they're very happy to serve a wide variety of customers and they have very little. And we look at like our estimates of training compute, they have the least of any hyperscaler, know, if don't even, yeah, ex Oracle maybe. It doesn't seem like there's much strategy there. I know both, you know, Microsoft in the last two quarters has been talking about a little more, you know, AWS on the call has been talking about a little more, but it's not a huge, huge, they're not doing it to the same extent that Meta is or trying to be competitive here or even Google with Gemini. And I think, especially someone like Dylan will tell you, if you're not trying to compete at the frontier, there's really not a place for you, especially if you're only dedicating a few 100 megawatts to internal you know, one internal use cases like serving Amazon retail, but then two, training. There's a lot of commitments, yeah, to make to be good at this. [00:33:14] S2: It's it's a conversation for a different day, but I look at these Microsoft job cuts, and I see it as the glimmer of evidence that they're going to try to compete in the future. They got burned. They obviously got burned pretty bad by OpenAI.
00:33:14 · Nilay Patel, Joey Brookhart
[00:33:14] S2: It's it's a conversation for a different day, but I look at these Microsoft job cuts, and I see it as the glimmer of evidence that they're going to try to compete in the future. They got burned. They obviously got burned pretty bad by OpenAI. [00:33:25] S4: Yeah. I mean, they have in the new agreement that they signed, they have the right to monetize OpenAI models for essentially not paying OpenAI anything. They're going to have, you know, some interesting things ahead where they monetize OpenAI models or even through like Microsoft three sixty five CoWork and Copilot applications where they're not paying OpenAI anything for a Frontier model.
00:33:25 · Joey Brookhart, S0
[00:33:25] S4: Yeah. I mean, they have in the new agreement that they signed, they have the right to monetize OpenAI models for essentially not paying OpenAI anything. They're going to have, you know, some interesting things ahead where they monetize OpenAI models or even through like Microsoft three sixty five CoWork and Copilot applications where they're not paying OpenAI anything for a Frontier model. [00:33:51] S0: Support for the show comes from Outshift, Cisco's incubation engine for frontier technology. You can find multi agent AI in every enterprise road map right now. But here's the problem everyone's facing. Agents can pass messages but can't think together. These systems silently underperform through cognitive failures, misreadings, unverified claims, false consensus, and conventional monitoring can't detect them. Outshift by Cisco is building the fix with their new comprehensive resource, the Internet of Cognition. It's an open source guide that's a foundation for building multi agent systems from design to production. The goal is to give agents shared context, shared memory, and guardrails, all to drive the results we actually expect from AI. You can lean on this resource to understand AgenTeq AI's evolution and how it shifted from isolated agents to orchestrated superintelligence. You can gain insights for how to future proof your business by tackling complex challenges with multi agent systems. You can read the paper, experience a demo, grab the code from outshift.com. That's outshift.com.
00:35:05 · S6, S3
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00:36:10 · S3, Nilay Patel, Joey Brookhart
[00:36:10] S3: Why can't we get AI to production? Our competitors are all ready. How do we keep data secure? When do we actually see ROI? All this talk about AI, but talk doesn't transform businesses. AWS AI cuts through the noise, making AI easier to securely deploy and scale. With ready to use agents and the broadest set of AI tools and services, you can build, buy, or partner your way. Stop overthinking. Start building. AWS AI is how. [00:36:47] S2: The other dynamic here, and and you brought it up earlier, is over the last few weeks, there's just been a lot of stress about Neo Clouds, whether they will succeed, whether they will fail. I think Elon Musk said there will be a guppy like extinction event which is just a brutal metaphor to use to describe a bunch of data centers. But these this is a bunch of circular financing and NVIDIA stood a bunch of them up and maybe the hyperscalers are just going to run away with it or maybe Anthropic demands, maybe they will want to own more of their own compute because renting it is precarious in all these ways. What do you make of the Neo Clouds and do you think they're going to survive the market actually shaking its out shaking itself out as these companies go public? [00:37:26] S4: Yeah. Look, Elon is is... Obviously has some incentive to say Neo Clouds are going to be extinct. You know, there's a lot of... And cluster max, someone else just does amazing ratings of the Neo Clouds, there's a lot of like Neo Clouds that are like ex crypto miners that are not good businesses and are not good at operating. And to