Matt Garman lays out "building blocks" at AWS re:Invent

Welcome to Runtime! Today: AWS strikes a balance between its cloud computing core and its AI ambitions, Intel's Pat Gelsinger "retires," and the latest funding rounds in enterprise tech.

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Meet the new boss

LAS VEGAS — Customers, partners, and even employees have complained about AWS's overwhelming emphasis on generative AI technology during its public events over the last several years, and Matt Garman seemed to get that message during his first keynote address as CEO. AWS certainly didn't ignore AI during Garman's presentation Tuesday, but it spent a significant amount of time on the services that turned it into a $100-billion a year enterprise computing powerhouse: compute, storage, and databases.

Perhaps befitting someone who was around during its earliest days, Garman emphasized an old message from AWS: we provide the raw materials for the modern digital economy. There were two acts in today's presentation, and Garman opened the morning by rattling off new enhancements to the services that drive most of its revenue.

Garman started off his AWS career running the flagship EC2 compute service, and introduced new instances running Nvidia's Blackwell chips as well as AWS's own Trainium2 chips, which are now generally available.
AWS now offers fully managed support for Apache Iceberg tables in S3, which will help more companies move their data into the open formats that are taking the data analysis world by storm.
And the company introduced a new database: Amazon Aurora DSQL, which Garman described as "the fastest distributed SQL database anywhere" and compared it favorably to Google Cloud's Spanner.

The second act underscored how AWS is trying to carve out a place for itself in the exploding market for generative AI services, where its previous accomplishments don't necessarily matter.

Amazon Q — which was the big, if underwhelming announcement from last year's re:Invent — is AWS's take on the AI assistant, and Garman spent a significant amount of time talking about new features for Q Developer.
Q Developer can now launch unit tests, generate documentation, and help operations teams solve performance issues.
It can also help companies migrate from older technologies to newer ones, including the tricky process of finally modernizing mainframe applications.
"We think that Q can actually turn what was going to be a multiyear effort into like a multiquarter effort, cutting by more than 50% the time to migrate [off] mainframes," Garman said.

While this year's re:Invent keynote didn't really break new ground or change the trajectory of the enterprise tech market, Garman's solid, no-nonsense approach (not a single competitor was awkwardly trash-talked) came off well as businesses gear up for a year that will determine whether or not their generative AI investments will pay off. It did, however, signal that an ongoing internal debate over the best way to build services for those customers has entered a new chapter.

As it grew into an enterprise powerhouse, AWS sought to replicate everything enterprise tech builders could do in their own data centers, and those early customers loved the freedom to mix and match basic services to meet their unique needs.
But later arrivals to cloud computing found themselves overwhelmed by the sheer number of what Garman called "building blocks" — like wannabe-DIY shoppers at Home Depot wandering through the massive aisles with a glazed look — and AWS started to offer managed services that made it easier to get up and running.
However, while there are a lot of benefits to managed services, AWS has often struggled to deliver managed services with the same quality and reliability that its building blocks promise.

Over the years cloud computing Kremlinologists have examined re:Invent keynotes for signals that show how the company is thinking about this pendulum when it comes to the future of its product strategy. This year's edition felt like a return to the early days, but Redmonk's Stephen O'Grady wondered if that might be a mistake.

"On the one hand, Amazon … [has] historically done primitives well and abstractions not so well. So this return to its roots, as it were, likely bodes well for its current customers. On the other, the growing sea of primitives is, in and of itself, growing less manageable," O'Grady wrote on Bluesky.
The reality is that if AWS wants to keep growing, it needs to continue making the best building blocks on the planet for companies that value flexibility and customization, and it needs to offer companies that need more help something other than a contact at Accenture or Deloitte.
As the generative AI hype settles down, solving that challenge will be one of Garman's top priorities for the years to come.

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Taped out

Pat Gelsinger, who would be on Intel's Mount Rushmore if such a thing existed, was forced out of the CEO spot over the weekend by a board of directors impatient with his turnaround plans for a company that was once the most important force in technology, according to Bloomberg. Most of the problems that led the company to lay off thousands of workers and lose billions of dollars during his tenure were not his fault, but it's safe to say his remedies didn't take.

The broader question is what comes next for Intel, which is still the predominant supplier of CPUs to the enterprise tech market and the only major U.S.-based manufacturer of chips, period. The abruptness of Gelsinger's "decision" to "retire" indicates there is no backup plan in place to fix the company's problems, which include a foundry business that is losing incredible amounts of money.

It's an ignominious end for Gelsinger, who designed one of the CPUs that ensured Intel's transition from memory chip maker to processor vendor would actually work and ran different parts of Intel over a 30-year-career at a company he clearly loved. It's also a reminder that while today's tech giants seem invincible, they're not.

Enterprise funding

LogicMonitor raised $800 million in equity and "strategic funding" that values the monitoring and observability company at $2.4 billion.

Tenstorrent landed $693 million in Series D funding to expand the market for its unique hardware, which was designed to develop and run AI applications.

Crusoe raised $686 million in new funding, according to a filing with the SEC spotted by TechCrunch, as it pivots from renting cryptocurrency hardware to building AI data centers.

Halcyon raised $100 million in Series C funding for its ransomware prevention software, which helps companies recover quickly from attacks.

/dev/agents (sigh) scored $56 million in seed funding to help four former Google and Stripe executives build "an operating system for artificial intelligence agents," according to Bloomberg.

Lightning AI secured $50 million in new equity funding for its AI application development platform, which helps companies build AI apps using the PyTorch Lightning framework.

The Runtime roundup

Salesforce beat Wall Street expectations for revenue during its third quarter and increased its guidance by a fraction, which was good enough for investors to send its stock up 8% in after-hours trading.

The U.S. Federal Trade Commission launched an antitrust investigation into Microsoft right before the holiday weekend, centered on its software licensing practices and deal with OpenAI, according to Bloomberg and The Information.

Thanks for reading — see you Thursday!