Amazon Head Of Prime on Tariffs, Alexa Plus Rollout, and AI Differentiation — With Jamil Ghani

Channel: Alex Kantrowitz

Published at: 2025-04-30

YouTube video id: J8nT1BN6ODY

Source: https://www.youtube.com/watch?v=J8nT1BN6ODY

What is Amazon seeing in the early days
of the trade war? And how will Alexa
Plus change shopping and perhaps much
more? That's coming up with the head of
Amazon Prime in a very busy week in
Amazon land right after this. Welcome to
Big Technology Podcast, a show for
coolheaded nuance conversation of the
tech world and beyond. We're joined
today by Jani. He's the VP of Amazon
Prime in an exceptionally busy week in
Amazon land where the company seems like
it's at the center of the news cycle in
the trade war. We're going to touch on
that, but we're really going to have a
conversation about the future of
shopping uh in in AI bots and whether
Alexa plus will live out that vision and
maybe compete with Chat GPT one day. So,
it's going to be a fascinating
conversation and I'm so glad to welcome
you to the show. Welcome Jamil. Great to
see you. Great. Great to see you. Thank
you so much for having me. Yes,
definitely great to have you here. We're
going to talk all about what's going on
with Amazon uh with Alexa Plus and
Amazon Prime. But of course, I would be
remiss to start this interview without a
mention of what's going on in the news.
We're recording on Tuesday, April 29th
for a publication date of Wednesday,
April 30th. So, this is right when the
news is happening. Kind of a crazy
moment uh for Amazon. And honestly, when
you logged on today, I was glad to see
your face. Guess I'm glad that you
decided that this was still worth doing
because this is what's happening uh for
for listeners and viewers. So uh first
of all, Punch Bowl News, a publication
in Washington DC, reported that Amazon
is going to start displaying how much an
item co items cost is derived from
tariffs right next to the product
products total listing price. Um the
Wall Street the the White House then
responded. White House spokesperson
Caroline Levit told uh a group of
reporters told the White House briefing
room uh that Amazon's decision to label
tariff price hikes was hostile and
political action. And then another
report showed up moments later where an
Amazon spokesperson said uh this was
never under consideration for the main
Amazon website and it was something
discussed uh for Amazon Hall which is
Amazon's Shien and Timu uh competitor.
Basically if you want to buy something
for $20 or less uh some products you
might get that notification. Um Jal,
could you just confirm with us here that
that is indeed what the story is going
to be that the main Amazon site is not
going to have those uh tariff uh prices
and if they are going on hall or if they
are under consideration for hall, what's
the thought behind that? Yeah. Um thanks
for the question. So, just to be super
clear, the team that runs our ultra
lowcost Amazon Hall store considered the
idea of listing import charges on
certain products. This was never
approved and it's not going to happen.
So, this isn't happening at all. No,
it's
a the information is incorrect. Okay.
So, I'm just going to make sure I'm
clear. Whether it's Amazon Hall, whether
it's Amazon's main site, we are never
going to see tariff charges anywhere on
Amazon. You know, it's this is a
incredibly dynamic situation and never
and always are difficult questions. But
this was considered for our ultra-
lowcost store alone, Amazon Hall. It was
considered, it was not approved, it's
not happening, it was not considered for
our main site. Okay. Well, thank you
again. It's always great to be able to
speak with people in your position
because we can sort of make sense of the
headlines. When it's true, we'll find
out. And when it's a little off or a lot
off, we'll also find out. So, I
appreciate you clarifying that for us
right off the bat. Now, let's talk about
tariffs more broadly. I'm just curious
from your perspective. I mean, right now
we're in this position where we have
this 90-day pause before a lot of the
global tariffs are going to go into
place, but there is 145% tariff coming
in from China. You're the head of Amazon
Prime. What are tariffs doing right now
uh to the Amazon marketplace and to
Amazon first-party sales? Yeah, I think
the important thing is to ground in
first principles. Our our objective
always has been will continue to be
serving customers having an exceptional
customer experience. Um in order to do
that over the last many years, we've you
know been been offering uh our services
in the US since the mid90s. uh we've
been diversifying our supply chain and
so that is not related to the current
situation. That's been a a event kind of
gradual process we've led through in
order to work with sellers and vendors
all around the world. Um and that's just
good business in order to ensure that
that superb customer experience. The
current situation is it's super dynamic
to say the least and so we're navigating
it to make sure that we serve customers
really well. We're working closely with
our seller and vendors all around the
world to ensure that there's as minimum
disruption to the customer experience as
possible. Um you know the economic
situation uh uh is uncertain. Um and so
you see that in consumer uh spending
behavior. But the good thing is that uh
Amazon continues to be focused on the
three key principles that have mattered
to customers always and we think will
continue to matter to customers which is
the you know largest selection possible
at the most compelling prices delivered
uh as fast as possible and as
conveniently as possible and you know
that's what we're focused on at Amazon
in our store and uh in particular for
our prime members who are our most
engaged customers. Okay. Okay. So, I
definitely want to talk about the
flywheel because I have some questions
about that regarding tariffs. But first
of all, you mentioned that you're
diversifying. You've diversified your
supply chain and I've got some numbers
that I'm looking at and I'm kind of
curious if you could comment on them
about how much of Amazon's supply chain
is uh stemming from China. So, the
numbers I see is that a decade ago there
were 20% of third party Amazon sellers
based in China. Uh today it's 65%. So,
I'm curious if you could share whether
that is ballpark accurate or accurate in
and of itself. And when it comes to
diversifying your supply chain, is that
large of a reliance on China a good
thing? Yeah, I can't comment on the
specific numbers um uh right now, but I
can tell you that we work with sellers
and vendors all around the world. Over
that period, our business has also grown
substantially, right? And we have um uh
more ways for customers to get access to
more categories, 35 categories uh of
products across our store in the US. And
so um we work with uh sellers and
vendors based in China. Uh but we work
with um sellers and vendors all around
the world. And so we feel like uh we can
navigate the current situation um to
ensure that you know superlative
customer experience. Okay. I won't
hammer home on this too much, but I just
want to ask you one more question about
that. Um, I think the experience from a
lot of shoppers, you know, when you're
I'm an Amazon shopper, we have many
listening. I think it's more popular
than cable in the United States,
definitely than church. Um, so when
you're an Amazon shopper, you have
noticed that there's definitely been an
increase in Chinese vendors. And um I
just wonder if there's going to be if
there is like some liability from uh
putting having so many Chinese sellers
on Amazon. Not that I have anything
against Chinese sellers. I bought lots
of stuff from them. But if China and the
United States can have this moment where
they're trying where they're sort of
peeling away their trade agreements. Um
is that a how how does a company like
Amazon deal with that? Yeah, I think um
our company is founded on the
fundamental belief that customers value
choice. Um that is true in the selection
we offer. That's in um true in the the
vendors and sellers in which we engage.
Any one item often times has multiple
buying options that might meet different
needs that customers have. Same is true
with the speeds we offer, etc. And so,
um yeah, I I think the current moment is
what it is. uh we're going to continue
to have a marketplace that has a
diversity of product selection available
a variety of ways. Um and that might eb
and flow given sort of macro external uh
um uh kind of factors. But we think that
we have a a resilient business because
we give customers so much choice. um uh
you just go to any category and I think
customers are universally better off
because they can use search, use
recommendations, find exactly the the
item they want but also have that to
compare against all the different
options available to them. And so that
might eb and flow given the current
situation but that fundamental belief in
uh giving customer choice and having a
great customer experience kind of I
think is enduring. So you don't think
that Amazon has overindexed on China and
even if these tariffs stay in place, do
you think the experience is going to
basically stay the same? I think um we
have uh sought to meet customer demand
uh and what uh uh you know what does
well in the store is what customers want
to engage with. Um and so uh we're
reacting to that, right? We don't have a
a uh we have a store that we want to
work for that uh we've set up that we
think has um uh efficient search uh you
know great navigation, great
personalization, a fantastic supply
chain to make the post-purchase
experience fantastic. Um and uh what
shows up in the store is a result of
customer interest and customer demand.
Um and so uh you know we we on the back
end of it diversified that to be
resilient as a business and as a supply
chain. Um, but I think the experience is
meeting customer needs and uh it will
continue to do so. That's what we're
focused on is making sure that we have
the right selection in the store um to
meet that customer demand. Okay. So,
let's talk a little bit about the Amazon
flywheel, right? The best selection at
the best price delivered to you in the
best possible way and probably in the
speediest time.
Um, I wonder what's going to happen with
the sellers uh in this moment because
I'm sure you've seen there's the report
that came out in Reuters a couple days
ago talking about how some sellers are
not going to participate in Prime Day
where they traditionally give discounts
because they see that they're they want
to make their inventory last and they're
less interested in discounted
discounting because if this holds then
they're going to need basically
everything that they've brought in
pre-tariffs. Uh, are you gonna and I
think Prime Day is coming up in July, so
there's still some time. Any concern
about the robustness of Prime Day
because of a trend like this from
sellers? Yeah, the signals so far, Alex,
are strong. Um, the the kind of uh the
work we've been doing with uh sellers
and vendors to uh get ready for Prime
Day is off to a great start, pacing
exactly where we want it to pace. Um,
I've seen the reporting as well. There's
always going to be situations and you
know it is an an unprecedented moment uh
that all of us are navigating here but
so far the uh signals are that it's
going to be a fantastic Prime Day and
we're looking forward to you know having
you know record setting deals attracting
um a record setting number of Prime
members to join Prime like we have in in
previous times with Prime Day and Prime
big deal days in the fall. Okay, so now
I kind of have to get to some of the
vibes questions. Um, what is the vibes
among sellers? I mean, are they feeling
like this is going to shake their
business up or I mean, I imagine there's
a lot of disruption right now. Yeah, I
think the sentiment amongst uh sellers
is uh much like where we started this
conversation, which is it's a it's a
complicated, rapidly changing
environment. It's hard to know um you
know uh at any given moment where things
stand, but um uh you know the the
sellers and vendors we work with um are
aligned with us on making sure that we
have a great customer experience in the
store. And so we're working productively
together to make sure that we don't have
um we have the selection available,
inventory is available, the event is
going to be fantastic and you know every
day uh as well. It isn't just about
Prime Day, although Prime Day is really
important to them and to us. Um, it's
also ensuring we have a a good everyday
shopping experience on the the three
aspects that you highlighted before. So,
you know, everybody's everybody's sort
of navigating as the situation develops.
And what about the vibe among consumers?
I'm kind of curious. It sounds like
there might have been a rush to buy
stuff before the Liberation Day tariffs
went into play. Did you see that? And
have you seen any pullback uh
since? Yeah, we haven't we haven't seen
anything material in the numbers as yet.
Like there's been there's been sort of
like variations that are hard to tell
from, you know, like uh from just normal
variations you'd see in the business. Um
um I think in if
if Prime Day this year operates like
Prime Day in recent years where there
are sort of other macroeconomic factors
like during the pandemic, I would expect
that you will see uh consumers stocking
up to take advantage of deals. I know in
my household, I have, you know, a
8-year-old, a four-year-old, and a
10-month-old uh daughters. Uh our
household needs a lot of things to run.
Um, and so we definitely take advantage
of the Prime exclusive savings to stock
up on stuff that we know that we're
going to end up needing for our
household or for our our family. Um, and
so I'd expect that the same will be true
for for Prime Day this year, if not more
so for the reasons that you cited. But
let's take Prime Day out of it. I mean,
what is the current vibe among
consumers? You know, Amazon touches so
many millions of consumers and I mean,
that's a sort of jargony way to say
people shopping for stuff. Yeah. Are you
seeing any hesitance to show up in the
numbers given the uncertain economic
climate right now? I think we we
continue to see strength in the part of
the business that's growing the fastest,
which is uh our everyday essentials and
our groceries and what have you, which
is which is a you know a push we've been
making for years now, speeding up how
quickly you can get the things you need
to run a busy household. Um so that
continues to be really robust and you
you see strength across um the store
because our prices are very competitive.
Um you know the speeds continue to be
very very strong. So the the the
business is is robust. Prime membership
continues to grow all around the world
including the US. So um we're seeing
resilience as of today. But there is
there you know there's there's a lot of
macro factors on on uh on uh consumers
minds. But Amazon against that backdrop
tends to do quite well because we've
organized our business to make sure that
we have the best selection at the lowest
prices delivered really fast like you
said earlier. Yeah. So just to sum up
sum this part up and then we can move on
to the more fun stuff. Um it seems like
what you're saying is even if we see an
enduring trade war and I I'm kind of
skeptical that we'll see much more of
this. Um Amazon should be in a good
place because it sources from countries
outside of China. uh because it's able
to sort of shift things within the
business quickly and could even gain uh
where you see maybe some others who
don't have that much flexibility
struggle to make sense of it. Is that
the right way to read this? I think
that's a good summary. I think that's a
great summary. We have a very resilient
business that's focused on first and
foremost serving customers. And in doing
so, we we sort of had engineered our
business behind the scenes to make that
possible. And whether it's uh trade
disruption or the pandemic or economic
softness for other reasons, um we've the
business has tended to do well because
customers can trust Amazon to give them
the selection at the best prices and
deliver it really fast.
Yeah. Well, you're good at saying that
slogan. though. But that has been that
has been what's worked for Amazon for so
long. All right. Uh look, Jal, this is I
I know you have to be very careful in
some of these answers like uh seems like
a misreported nugget in Punch Bowl sent
uh the White House steaming at Amazon uh
just a few hours ago. Uh that being
said, uh I appreciate you being willing
to field these questions and to speak
with me about it. So, thank you for
that. Of course. Thank you for the
questions. All right, let's talk about
AI uh Alexa Plus in particular. Uh where
where is Alexa plus? Because I was at
the event as were you in February. I
think it was February 26th and on stage
we heard Panos talk about how this is
coming out in you know next month which
would be March and we're here at the end
of April and I know uh Alexa Plus has
rolled out for some people but not the
masses yet. So what's going on with that
product? Yeah, it's it's uh we're we're
rolling it out. Um uh we're we're being
um really deliberate about that roll
out. It's a like we talked about then
and I can overview now. It's a
incredibly significant com you know
rethink and rearchitecture of a service
enjoyed by you know 500 600 million
devices around the world. Um and so uh
we want to do that really really well
and we don't want to disrupt the
experience that customers have come to
rely on. Um uh the feedback has been
positive. uh it uh we're finishing up
the product and we're uh looking to
scale that in the coming weeks to
significantly more uh customers, but
it's it's underway. Um but um we want to
get it right. Uh I want to have a
superlative experience. Um so uh it's
going going to plan. So I probably
should have asked this question when
Panos was in. Um when do you think that
we can expect to see a full roll out of
this product? I mean, I understand the
desire to get it right, but I think I
and many people who watched that event
were like, "Oh, like I'm going to get
Alexa Plus next month." It's not it's
not with us yet. So, um, the full roll
out, is that months away? Is that next
year? What do we what can we expect on
that front? Um, I don't have a specific
date to offer you today because we're
we're adjusting the timelines and, you
know, uh, according to the roll out. Um
but in the in the in it's months it's
not next year. Okay. So this year what
have you guys learned in testing Alexa
plus I mean what in the early moments
you can you talk a little bit about
what's resonated and maybe give a little
explanation since I've like now you know
cited it but let's we could also take a
step back and talk about what exactly
it's going to do. Yeah. So uh that's a
good place to start. Um, the in my own
words, the way I describe Alexa Plus,
it's a it's a it's the new version of
Alexa, which um is much more
conversational, much more uh
intelligent, um, and it's more
actionoriented. I can talk about uh, all
of those pieces. Conversational in that,
um, it can go back and forth with you,
uh, engaging on a topic of interest, on
a a task of interest, you know, all the
things you you want to do. And I'll talk
about all the things you can do with it
in just a minute. It's more intelligent
because it is um been trained on a
corpus of knowledge um you know world
knowledge Amazon specific knowledge
about the product catalog about prime
videos catalog music etc etc um and it's
more actionoriented it can do things on
your behalf whether it's on one end sort
of um making it really simple to manage
your calendar um to using uh the other
prime benefits shopping video music etc
etc., etc., to doing things out in the
quote unquote real world, book you an
Uber, uh, you know, uh, get you a, uh, a
handy person to come to your house to
fix something, um, and everything in
between. And so, um, I I look forward to
telling you about how my household has
been using it because it's it's sort of
like quint they're the best anecdotes of
like what we're learning because, yeah,
the bottom line is we're learning that
uh, our customers are using it for a
whole host of things. Um, and that's
exciting because it is a very flexible
uh personalized experience much more so
than the uh classic Alexa. Okay. So,
how's it uh coming to use in your
family's house? Yeah. So, um I um
married um I have three young daughters,
8, four, and 10 months like I said
before. Uh so, just let's just say it's
sort of like controlled chaos is the way
to describe the household. Two working
parents. Um and so, you know, I'll give
you some anecdotes of real things.
rewind to to October. My older two
daughters were uh uh convinced that they
wanted to be ninjas. And so they thought
it would be fun to go up to uh uh Alexa
Plus and ask for suggestions on what the
baby could be dressed up as. And so they
described in their own parliament. I'm
just listening, you know, in the kitchen
while I'm doing something else. Hey,
we're going to be ninjas. What would be
really funny? Because of course it's
eight-year-old humor. It's like what
would be really funny for Juliana to be?
And um uh Alexa Plus came back and
suggested that the baby should dress up
like a sushi roll. Um and then I had a
clickable link for same day delivery of
the costume from Amazon.com. So close
that loop very simply. I then said, "Oh,
this is really interesting." Like, so
it's like, "Oh, what about a different
idea that is more in the theme of ninjas
as warriors?" And so then it came up
with another costume which was a little
shogun uh with a mustache for the baby.
I'm like, we're rolling here and I'm
like, this is great. And we end up
getting the sushi roll and the baby was
a sushi roll for uh for Halloween. Um
so, you know, close that loop in, you
know, it was like a delightful
experience and also closed a to-do for
mom and dad in the in the course of just
a couple minutes. Um another example, um
you know, uh lots of snacks in our
household as you would imagine, uh with
growing kids. Uh my wife walks out of um
the cupboards, searching around the
cupboards, looking for this particular
uh snack bar that they like called Go
Macro Bars. And she turns to Alexa Plus,
he's like, "Alexa Plus, let's order
Alexa, let's order some uh Go Macro
bars." And so responds, it's like, "Oh,
you've
purchased this flavor. There's also this
these other two flavors." Oh, that's
interesting. Let's do this third flavor.
Great. It's like, you've previously
purchased a sixcount box. I noticed that
there's singles and there's also a case
for the other room. I say, "Oh, how much
is the case per per unit because I was
like, I'd love to save some money." And
it calculated it on the fly and told me
that. My wife then said, continued the
conversation. He said, "Oh, let's get a
case of the I think it's blueberry or
something. Um, uh, and let's go ahead
and check out." We checked out and it
was at our doorstep by 5:00 p.m. that
afternoon. That was like a minute. No
phones were taken out. We could do that
while we were helping the girls with
other things. And those those are just
two of a hundred examples like that
where it's a it's just sort of a a much
more assistive assistant. It's like able
to do more and close the loop on fun
things and also very practical things
that a household needs to do. You know,
it's interesting, Jamil, because when
you talked that you told me that your
daughters were talking to Alexa Plus, I
was like, "Oh, um, maybe this version,
this newer version of Alexa is going to
be something like a comp a companion."
Because there are seemingly two
different types of ways that people are
building this. And I'd be very curious
to get your perspective on this. It
seems like some are building these AI
assistants as true assistants, things
that will help you get stuff done and
others are trying to build it as a
companion. Uh, it was very interesting.
I had like backto-back conversations uh
with Panos and Daniel talking about
Alexa Plus and then Mustafoson at
Microsoft talking about Copilot. And it
seems like Amazon's version or vision
for this assistant is to be assistive
and help you get stuff done where
Microsoft's vision is for it to be a
personality. Do you see that both these
uh both these types of visions diverging
and some companies building this
assistant style type of chatbot and
others saying this is going to be a
companion?
Yeah, it's interesting you used a word
there personality. Um I think either can
have personality. We Alexa has a
personality and Alexa plus it takes that
to the next level. Um and it it's it's
fun, it's whimsical, it's got a sense of
humor, but it is very helpful. Very very
helpful. And so yes, we are absolutely
building an assistant that is assistive
that is helpful that is there to make
life easier from you know lots of wants
uh lots of needs definitely into wants
as well. We can talk about kind of how
it makes entertainment better. Um, and
others are choosing other paths. As a as
a as a user of other services as well,
you know, from a from my own research
and learning standpoint, I I I recognize
the split, but I think uh it would be
incorrect to say that um Alexa being
helpful means that she doesn't have a
personality. She absolutely does have a
personality. And one of the things I
love most is the ability to uh prompt
Alexa with memories, asking her to
remember something. So, for example, she
remembers birthdays. She remembers that
my eldest daughter prefers vegetarian
food, but also does eat meat
occasionally. And so, when she makes
recommendations for restaurants for us
to go out to as a family or or what have
you or recipes to make at home, she, you
know, takes that into consideration.
That is being really helpful, but she
does it in a way that it doesn't feel um
clinical. It feels very much like
integrated into kind of our life. Um you
made a point about the kids conversing.
Um there you know Alexa plus also uh you
know we have uh kids plus for uh our
kids um which is like books and content
and what have you that they enjoy um uh
there there's a feature to create
stories with uh Alexa um and we sit and
do that and it lets the kids kind of uh
you know have a have an experience a
really safe experience with generative
eye creating a story that's delightful
for them. It's something we do together
as a family. It's not a replacement
obviously for um you know the time we
spend with them. It's you know it's
adding a new dimension to that time. Let
me ask the question in a better way.
Yeah. So what Mustafa said straight up
was that personality is going to be the
differentiator for AI bots. And so I'm
curious again do you believe that
Alexa's personality is going to be the
differentiator or the things it enables
you to do? H uh thank you for the
reframe. I think that the personality is
helpful but I think ultimately um uh I
believe we believe that um uh Alexa will
be um indispensable because she's
helpful because she could get things
done for you. She can help you with
managing your calendar reminders. She
can help you, you know, uh, get access
access to the right content. It can, she
can help you shop. She can help you do
other services. And that list of
services will will grow and grow with
time. You saw some of those in the demo
in for the early days. Um, I think
that's really what is going to be a
differentiator for Alexa and the fact
that she's present in the devices we all
have in our homes. Um, um, and new
devices that are coming that are take
that are purpose-built to take advantage
of Alexa Plus.
Okay. And that brings us to another
interesting wrinkle here. So on our
Friday show last week, we talked about
how OpenAI is, you know, potentially we
I didn't get confirmation, but they just
announced shopping this week, so we can
assume that it's happening. Uh the
shopping integration within Chat GPT at
this moment is going to be basically
surfacing um different products and
images of products and allowing you to
kind of sort through the things you want
to shop. and then I think sending you
off of chat GPT to go make a purchase.
But there was also uh some screenshots
of code that may show them um being in
the works of trying to build Shopify
checkout directly into OpenAI and we
were talking about the fact that people
love Prime because they trust Prime for
the reasons that you brought up earlier.
there's the a great selection, uh, good
pricing, and it's going to get to you
faster than almost anybody will. Like,
we now see that you can basically order
some stuff on Prime and it will get to
you later that day. Um, and people are
starting to trust Chat GPT in a in an
interesting but different way, right? It
becomes a companion to them. And there
was a HB a Harvard Business Review story
recently talking about how like the
change uh for chatbots have gone from
idea generation to companionship. So
what's happening now is Chad GPT is
becoming a companion to people. It's
their their research assistant. It's
their con conversation partner which is
similar to what you want to do uh I
think with Alexa plus. Um, and you know
what happens then if people start to
trust these bots so much that they say
what product do you recommend and
similar to the trust in prime now
they're going to trust chat GPT because
they trust it to do so many things in
their life and then they can go shop
through their chat bots. So, I'm kind of
curious what you think about that and
whether you think you might end up
seeing Chachi BT kind of enter this game
in a way that maybe people didn't
previously anticipate. Yeah, I I think
about this a lot. Um I I go back to
um what we have tried to do over the
years with Amazon Prime is
um we obviously started in 2005 with 1
million items available in two-day
delivery and that was gamechanging at
the time. you remember what shopping was
online in 2005 and delivery fees and the
imprecision of delivery and the I don't
even know if it's going to arrive on
time uh was kind of like the the key
friction we all faced. Um and we we
removed that friction by saying hey
don't worry about how what your order
size is. Don't worry about when it's
going to arrive. Is this going to arrive
on time? We guarantee it. So on and so
forth um on basically everything we sold
at the time. And we've grown that
proposition uh over the years. And then
in 2011, we added the ability to have
that same level of convenience in video
and music and gaming and reading and all
these other benefits that get
transformed. And what you have today is
a program that I I think is a companion
to so many households, not here, just
here in the US, but you know, over 200
million households around the world
where it's like it's hard to imagine
running life without Amazon Prime,
right? Um and so Alexa plus being a part
of Prime um included at no additional
cost for our members extends that idea
in the way that you're describing which
is um whether you shop on desktop or you
shop in the mobile app or increasingly
you turn to a voice assistant whether
they're you know on the on the Alexa
device an Echo device or in your pocket.
um we just want to make it really simple
for our members to take advantage of all
that value, right? Um and so it's not
surprising that um other services would
want to integrate shopping to try to
meet that need. I think what sets Prime
apart is that it isn't just about having
the item. It's about making sure that
you have confidence in the price, making
sure that it's going to arrive really
fast at no additional cost. if something
unfortunately goes wrong that companies
stand behind it to make it right which
we do with our a toz guarantee and so I
I think um it's not surprising that
others would go to that space but it's
also um not any one thing that gives the
entire prime experience I think it's a
combination of you know sorry the
selection the price and the and the
supply chain uh invention that has
happened over 25 years to you know have
you know Last year we delivered 9
billion items same day or next day. 9
billion, right? Uh uh it is, you know,
in delivery fees alone, US uh Prime
members last year saved $500, right?
That's multiples of what you pay for the
membership, right? All of that is what's
sitting behind Alexa Plus. Um and the
the utility and the the the aid it's
it's seeking to bring. And so like I
think it's good that customers have lots
of choices, but I think we've got kind
of the special sauce to pull it together
for our Prime members. Did I get it
wrong? Did you refer to Amazon Prime as
a companion?
I I may have I may have echoed your your
words there. Uh but I do I do think like
I I think about my own household. Um,
you know, uh, not to be not to be too
much information, but like there I would
not be the first dad to admit that I'm
ordering the next box of diapers when
I'm changing the last diaper because I
realize that I forgot to get diapers.
Um, like it makes life possible. Um,
call it a companion, call it an
assistant, call it, you know, a
lifesaver. I think those are just
semantics. At the end of the day, we
want to be valuable and we measure
quantitatively how much value members
get and they're getting multiples of
what they pay uh back in uh all the
different benefits that they take
advantage of. Can I ask you, do you
think people are going to be friends
with their chatbots? I think some will.
I think like we we we live in a we live
uh in a diverse world with a lot of
interest and a lot of you know
technology being used in a lot of
different ways. I do I do think folks um
will turn to um uh chat bots for all
kinds of needs including companionship
including you know uh a sounding board
including all those things. I think all
those things are possible. Our take on
Alexa plus is we want to be um a you
know conversational intelligent helpful
assistant um uh to folks taking
advantage of all the benefits that Prime
offers um and and more. But if people
are going to be friends, and I'll I'll
let this go in a minute, but it's just
so interesting. I mean, if they are
going to be friends with their bots and
they are going to be able it seems like
they're going to be able to shop in
every bot, uh doesn't make doesn't that
make the personality side of this so
much more important to Amazon? Because
again, if you're going to be friends and
a companion with a chatbot, uh or maybe
it's a voice bot in in its next
iteration, um if it if you trust it and
it does the shopping research for you,
then you buy there, that's all of a
sudden it opens up completely new front
uh that Amazon didn't have to deal with
before. Well, yes and no. Like I I know
it's not quite the same thing, but you
you think about um folks were making
predictions about um you know the the
rise of e-commerce. It's like oh this is
the this is the end of physical retail.
That's that hasn't happened. We live in
a we live in a diverse world where
customers have lots of different
interests, lots of different jobs to be
done. And so there's a there's space for
a lot of different solutions. And so
yes, if some have uh uh com companion or
or kind of like relationships or
preferences um you know that will that
will uh impact um uh shopping choices
and choice of you know where they get
their entertainment what have you. But
the same is true with like was true with
search engines and like people still go
direct and you know people you know
companies innovate um to to make sure
that their value is clear to the
customer. So I I think yes and is uh
what I see coming. So then you know if
you think about the different iterations
of the web like you just brought up like
Amazon's a website and an app and of
course a voice interface with Alexa. Um
if the next iteration of the web there's
a chance that it might be is through
these chat bots. Could you see a world
where Amazon let's say partners with
open AI to bring Amazon shopping into
Jad GPT or does Alexa plus prevent you
from doing something like that? Uh I
can't comment on what we would or
wouldn't do but you look at some stuff
that we actually have done right like
buy by buy with prime we're working with
thirdparty direct to consumer sites to
to uh bring the same you know prime
delivery experience to third party
sites. um like you could have rewind the
clock five years ago and asked a
question like would we ever do then I
probably give you the same answer which
is I can't comment on anything we might
do in the future but you you fast
forward to today and we want to we want
to make it easier for customers and
members to shop wherever they want to
shop you know in addition we're now
surfacing you know uh product that's on
third party sites not listed on Amazon's
marketplace uh so that you know if
you're searching on Amazon.com or in app
for XYZ brand and we don't happen to
carry it uh we can uh we can facilitate
you you know finding that and and going
and shopping for it. So I think this
will continue to evolve um um uh going
forward. Uh we do think that um the
combination of uh offerings we have uh
we want to earn the business from
customers directly. Um you know that's
really important to us as it is to every
company. Um, and uh, we're we're going
to continue to do that, but you know,
who we might work with in the future is
like we'll see. But no talks with them
right now to do something like that.
Nothing nothing to share with you today,
Alex. You want me to much as you would
want me to share. Nothing to share. It's
my job as a reporter to ask, but I
respect my job. It's my job to hold the
line. Exactly. All right. Look, we're
doing what we can here. We're getting
some good stuff. That's right. Do do you
personally think that the that um
generative AI is going to be a new a
substitute for the web or sort of ingest
the web in some way or do you think the
web will remain what it is today? I
don't think it'll remain the same, but I
don't think it's going to ingest the
web. Um I think I think like again I'm
I'm a big believer that it like uh A
does not become B. A and B come together
to turn into this really interesting new
C. uh because there's just lots of
inventiveness going on. Um uh and I
think that there will be uh elements of
the day-to-day customer experience that
will be you know fronted by Genai very
strongly. Um you know I think a lot of
productivity knowledge work will be will
have like a sort of a you know a
persistent assistant to help with a lot
of that work. um then I think other
elements um will be more classic web if
you can call it that. Um um just like
there's you know there's there's a big
space in the retail space for walking
into a store and having a a great
customer experience in real life, right?
Like that that is hard to it's hard to
imagine replacing that need that we have
as humans. Same is true in
entertainment. Same is true in music.
Same is true in grocery and healthcare
and all the other aspects of the prime
program. Okay. I just have one more uh
Alexa plus question and then we're going
to go to a quick break and talk about
anthropic and some infrastructure stuff.
I I have to ask you is is Alexa plus
going to deliver? I mean you're using it
but I'm in this moment where I heard
Amazon make a promise about Alexa plus.
I heard Apple make a promise about Apple
intelligence. And I was speaking with
this about this with Panos as well that
like we see uh we've seen so many of
these demos of this sort of
all-encompassing uh contextually aware
AI assistant but as of yet the general
public hasn't seen it in in their hands.
Now of course there's a minimal roll out
at this point but just just assure us is
this thing going to deliver? I I I think
so. uh having used it now since uh late
last year um it it is a step change
experience from Alexa and Alexa's fairly
integrated into my household uh with
smartome and um uh you know uh access to
entertainment etc etc. Um, this is a
step change experience. Um, it uh it's
taking advantage of, as Panov said in
the in the uh demo back in February. Um,
it's take the technology has caught up
to the vision that we've had for Alexa
for years, for 10 years. Um, and so I do
think it's going to deliver. It's also
going to get better and better because
we are um working on kind of sort of
natively built uh uses that take
advantage of what uh the new Alexa can
do um on the newest devices. And so, you
know, where we start will not be
certainly where we end. Um and so I I do
have um uh high hopes for, you know, how
valuable it's going to be to customers.
Okay. Uh let's take a break and come
back and talk about infrastructure, all
the infrastructure that Amazon has
built, its partnership with Anthropic,
and maybe some more if we can get to it.
We'll be back right after this. And
we're back here on Big Technology
Podcast with Jamil Ghani, the VP of
Amazon Prime. Uh where to start, J?
Okay, let's talk about infrastructure.
There was a sense uh during the pandemic
that Amazon kind of overbuilt uh but
eventually those all that
infrastructure, right? you like I don't
know what did you double your warehouse
footprint because the idea was people
would just you know work from home shop
from home. Um the idea was that that was
a little bit too much uh because people
went back to old habits but it would
show up as a benefit because the company
would just get much better logistically
with all that investment. Is that is
that true and is that playing out for
you guys? Yeah. Yeah. So the I think the
summary I would say is uh just tweaking
a little bit what you said. We built as
aggressively as we did in the pandemic
in order to keep up with demand. We
wanted to um ensure uh superlative
customer experience. The first uh weeks
months of the pandemic were
unprecedented for us and everybody else
given the supply chain disruptions. And
so we we you know uh Prime became both
on the delivery and shopping side and
also on the entertainment side sort of
be became indispensable uh for all of us
around the world. Um and so we built up
our um warehouse uh capacity really
really rapidly. Um like you said of
course then you know there as a lot of
businesses there was a slowdown as the
you know the the world opened up and so
on so forth. The reality is while we've
right-sized some parts of that supply
chain footprint on the margin, we've
largely grown our business into that
capacity, right? And we've continued to
invest in new capacity. We continue to
invest in robotics um uh and you know
keep on making our supply chain um more
and more performant. The biggest change
we've done is also flipping the supply
chain to a regionalized supply chain
which has put more inventory closer to
the customer. Um, and that has sped up
our speeds and also reduce our cost to
serve. And so we've seen a lot of
goodness um, in terms of the investments
we've made. Uh, and we're happy we've
made them and we'll continue making them
going forward.
Trying to think whether I should ask you
this next question. All right, here it
comes. No filter on this one. Um, I
spoke with someone who used to work with
Amazon who like basically said that um,
I'm going to relay this in a less
politically correct sentiment, but he
was like
um, people aren't unique that if you
live in a certain zip code, you have
similar habits and Amazon is aware that
like let's say you have a community
where like Northace North Faces are
popular and people like to wind surf and
so that stuff will all be loaded in the
fulfillment center like effectively
Amazon knows what you're going to do
before you do. How do you feel about
that assessment? Yeah, I think I think
that's, you know, a spun a certain way.
Here's what I would say. Yeah. Like we
apply and we've been since the very
beginning, we've been applying machine
learning and advanced AI to better uh uh
organize our supply chain to serve
customers what they want when they want
it as cost-effectively as possible,
etc., etc. And so like any company that
runs a supply chain and has to manage
physical inventory, we have to be wise
as to where to put that inventory,
right? And so we use a whole host of
signals to understand where does it make
sense to put that inventory. Certain
inventory is more centrally located
because it's slower moving, certain
inventory that is fast moving, uh is
more decentralized, closer to the
customer, you know, certain parts of the
country. I grew up in Miami, Florida. Uh
it was really hard to find fleece. I
didn't even know what fleece was until I
went to college in the northeast because
you couldn't find it, right? This is
before the days of e-commerce, but you
couldn't find it in physical real real
estate. So, it's not a new concept to
say put the right products in the right
place for the right customers. And so,
that's that's my articulation. We we do
that with uh you know, machines that
help us uh do that at scale uh and do
that efficiently and like I said, get a
better cost to serve which we then pass
on to customers through you know, fast
speeds, right? Yeah. Hands off the wheel
was the initial program. That's right.
That I reported on deeply in my book. It
continues to be it continues to be our
our mantra of like to operate at our
scale and our SLAs's and our customer
bar. Uh you have to apply machines. And
that's why AI is not a new thing. It's
not a novelty for us. It's been core to
how we run the business on the store
side, but also on video, grocery across
the board. we've we've applied um um you
know the latest technologies on you know
machine learning and otherwise to uh to
to run the business at scale right and I
guess that's one of the core leadership
principles at Amazon is invent and
simplify that's right that's right
so you mentioned robotics a robotics
question for you I think one of the big
north stars for Amazon has been to
create robots that not just shuffle the
rock the racks around uh fulfillment
center but actually pick the products
out of the racks themselves uh and then
maybe even pack them. Mhm. There's been
some real advances in robotics. I don't
know if you saw they ran a half marathon
of robots in China a couple weeks ago. I
did see that. Uh how far is Amazon or
how far do you think the industry is
from creating robots that can
effectively pick those products? Um so
I'm not a roboticist. Uh first thing
although I did stay at a Holiday in
Express last night. I know in all
seriousness that's where it all happens.
So I can't So I can't tell you I can't
tell you how close or how far we are. I
know that our latest gen um uh
fulfillment center um uses robotics in a
whole host of ways including sort of
organizing on the belts and uh and what
have you. um you know our vision is uh
robotics and automation uh coexisting
with uh associates sort of serving
customers. And so um you know we're
really thoughtful about where we apply
automation, where we apply robotics um
uh to make sure we have a you know a
safe working environment for all of our
associates. And so like we're going to
continue innovating and you know uh
periodically we're releasing sort of the
nextg uh um fulfillment center and as we
build them out we will apply the latest
technology available but I I I don't I
can't say how close or how far we are to
any particular milestone. Yeah. Last
week I was out I met the co-founder of
this company Cobbot who was actually in
Amazon fulfillment for quite some time
and they have these like uh robots that
look a little bit like the FC robots uh
but they have these little pincers on
them and they can kind of grab like a
rack and push carts and things like that
and are starting to do that in uh places
like shipping terminals. So it's really
it's really remarkable how fast it's
it's coming along. And uh I think that's
a whole another it's a whole another um
kind of angle on that application of the
advanced um kind of learning techniques
and ML and AI. And so we're excited
about it and we like we've been
investing in robotics in our fulfillment
centers for years. Um right and so this
is just kind of continuing down the path
certainly accelerating now. Yeah. Yeah,
I've had a chance to come into a couple
fulfillment centers and see them at work
and it's it's pretty amazing. So, um
let's end with Anthropic. Amazon, of
course, has a very close partnership
with Anthropic. Billions of dollars uh
have been invested, but I guess the
sense is that Anthropic has mostly been
involved on the enterprise side, but
then again, I was at the Alexa Plus
reveal and saw Mike Kger, the head of
product at Anthropic there. Mhm. So I
want to ask you a little bit about how
closely you're working with Anthropic
and whether there could be more
collaboration with the consumer uh
application that they have. Claude,
um I can't comment on anything we might
be considering with Claude specifically,
but we work very closely with Anthropic
on a variety of different parts of our
business. um obviously it was
highlighted um uh uh in the Alexa plus
event but uh we're working with uh
Anthropic on other parts of the stores
business and other parts of the business
as well. So like um nothing to announce
with Claude their uh consumerf facing um
bot but um Anthropic is a close partner
of ours uh on various parts of the
business even beyond Alexa plus. Okay,
so let's round out with this. Uh, Alexa
Plus, when it rolls out, it's going to
be free for Prime members or available,
I think, at $19.99. That's correct. Per
month. Uh, how did you come up with
that? Because, uh, Prime cost
$14.99. $14.99 a month. So, you could
get Prime for $14.99 or you could get
Alexa Plus without Prime for $5 more
than that. How did you guys come up with
that? Well, uh, we on the the pro
the straight subscription for those that
are not Prime members, um, we just kind
of benchmarked on the value that we, uh,
believe we are um, we're offering uh,
and the, um, kind of market rate for for
uh, assistance of that type. Although we
think Alexa will be distinct in a bunch
of ways, you and I have talked about.
Um, in terms of Prime, like we're all
about adding more and more valid to the
Prime membership. these are our most
engaged customers. Um, and uh, you know,
we we obsess about making that
membership more valuable today than it
was yesterday. And so it was very easy
for us to say like we should give it to
our best customers. Um, uh, not only
because it's going to be a the newest
benefit, sort of think of it as a
benefit vertical, an assistant that can
help you do a bunch of things that you
and I have talked about, but it's also
going to make the existing prime
benefits better. Right? Like I gave you
a couple examples, but we've had the
similar anecdotes in our household and
finding exactly the right mood music in,
you know, in natural language, just like
going back and forth. This is the vibe
I'm going for, Alexa. Like, can you help
me find songs that are blah blah blah
blah for this kind of, you know, event
with my with my daughters? Um or, you
know, a piece of content on Prime Video.
You saw some of that showcased in the in
the launch event. So, um I think it's
going to make Prime itself better in
addition to being our latest benefit.
And so, uh, we wanted to bring that to
our to our, uh, best customers, our
Prime members. I see. I think it would
be ridiculous to sign up and pay five
extra dollars for a service that is
included in Prime for five less, but you
never know what people want to do. I
hope I hope uh, folks I hope folks uh,
will will check out Prime because it's
going to be, you know, get them Alexa
Plus, but a whole lot more as well. And,
um, I think it's a I think it's a good
deal. So 200 million, if I'm right, 200
million members of Prime Plus 200
million plus members of
Prime over 200 million members in 25
countries. Yeah, we just uh we just
launched our 25th country. $139 a year
or $14.99 a month. No price increases
coming with Alexa Plus or we have to
stay tuned. No, nothing to share. We're,
you know, we're focused uh like always
on adding more and more value and then
periodically we examine the price, but
nothing to share.
Well, J, it's always great to speak with
you. Now, this is our second time
talking. We spoke at the Alexa Plus
event. I've enjoyed both times uh
tremendously. Thank you for coming on.
Thank you for telling us more about
everything going on with Alexa Plus uh
with Amazon and for fielding the
questions and for uh respectfully taking
some of my um reporter digging and and
not getting mad at me. So, thank you for
that at all. I appreciate it. Thanks. I
enjoyed it, Alex. Thank you so much.
Definitely. People want to learn more
about Alexa Plus, where do they go?
uh they can go to uh amazon.com uh and
uh search for Alexa plus and they can
land and learn all about its
capabilities. Okay, awesome. And I
definitely recommend people uh check out
the interview I did with Panos Pane a
couple weeks ago and Daniel Rash was
there too, the head of Alexa. So, you're
going to want to see that. All right,
everybody. We'll be back on Friday with
Ran Roy to break down the week's news.
Until then, we'll see you next time on
Big Technology