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

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Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. We're joined today by Jamil Ghani. 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 in AI bots and whether Alexa Plus works.

will live out that vision and maybe compete with Chachi PT 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, 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 for Amazon. And honestly, when you logged on today, I was glad to see your face. I'm glad that you decided that this was still worth doing.

because this is what's happening for listeners and viewers. So first of all, Punchbowl News, a publication in Washington, D.C., reported that Amazon is going to start displaying how much an item's cost is derived from tariffs right next to the product's total listing price.

The Wall Street, the White House then responded. White House spokesperson Caroline Leavitt told a group of reporters, told the White House briefing room 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 this was never under consideration for the main Amazon website. And it was something discussed for Amazon Hall, which is Amazon's Shian and Timu website.

a competitor basically if you want to buy something for twenty dollars or less uh some products you might get that notification

Jamil, 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 tariff prices? And if they are going on haul or if they are under consideration for haul, what's the thought behind that? Yeah. Thanks for the question. So just to be super clear, the team that runs our ultra low cost Amazon haul 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, the information's incorrect. Okay. So I'm just going to make sure I'm clear. Whether it's Amazon haul, whether it's Amazon's main site, we're never going to see tariff charges anywhere on Amazon.

This is an incredibly dynamic situation and never and always are difficult questions, but this was considered for our ultra low cost store alone, Amazon Haul. 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. So what's the tariff?

What are tariffs doing right now to the Amazon marketplace and the Amazon first party sales?

Yeah, I think the important thing is to ground in first principles. Our objective always has been, will continue to be, serving customers, having an exceptional customer experience. In order to do that over the last many years, we've been offering our services in the U.S. since the mid-90s. We've been diversifying our supply chain. And so that is not related to the current situation. That's been a problem.

eventual kind of gradual process we've led through in order to work with sellers and vendors all around the world. And that's just good business in order to ensure that that superb customer experience. The current situation is 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. The economic situation is uncertain. And so you see that in consumer spending behavior. But the good thing is that 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

you know, largest selection possible at the most compelling prices delivered 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 in particular for our prime members who are our most engaged customers.

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 stemming from China. So the numbers I see is that a decade ago, there were 20% of third party Amazon sellers

based in China. 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 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 More ways for customers to get access to more categories 35 categories of products across our store in the US and so we work with sellers and vendors based in China, but we work with Sellers and vendors all around the world. And so we feel like we can navigate the current situation 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. I think the experience from a lot of shoppers, you know, when you're, I'm an Amazon shopper that we have many listening. I think it's more popular than cable in the United States, definitely than church. So when you're an Amazon shopper, you have noticed that there's definitely been an increase in Chinese vendors and that,

I just wonder if there's going to be if there is like some liability from 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 where they're sort of peeling away their trade agreements, is that a how does a company like Amazon deal with that? Yeah, I think our company is founded on the fundamental belief that customers value choice.

That is true in the selection we offer. That's true in the vendors and sellers in which they engage. Any one item oftentimes has multiple buying options that might meet different needs that customers have. Same is true with the speeds we offer, et cetera. And so, yeah,

Yeah, I think the current moment is what it is. We're going to continue to have a marketplace that has a diversity of product selection available a variety of ways. And that might ebb and flow given sort of macro external kind of factors. But we think that we have a resilient business because we give customers so much choice.

You just go to any category and I think customers are universally better off because they can use search, use recommendations, find exactly the item they want, but also have that to compare against all the different options available to them. And so that might ebb and flow given the current situation, but that fundamental belief in giving customer choice and having a great customer experience kind of I think is enduring.

So you don't think that Amazon has over indexed on China? And even if these tariffs stay in place, do you think the experience is going to basically stay the same? I think we have sought to meet customer demand and what you know, what does well in the store is what customers want to meet with. And so we're reacting to that. Right. We don't have a we have a store that we want to work for that we've set up that we think has

efficient search, you know, great navigation, great personalization, a fantastic supply chain to make the post-purchase experience fantastic. And what shows up in the store is a result of customer interest and customer demand. And so, you

You know, we on the back end of it diversified that to be resilient as a business and as a supply chain. But I think the experience is meeting customer needs and 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 to meet that customer demand. OK, 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.

I wonder what's going to happen with the sellers in this moment, because I'm sure you've seen there's the report that came out in Reuters a couple of 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 want to make their inventory last and they're less interested in discounting, because if this holds, then they're going to need basically everything that they've brought in pre-tariffs.

Are you going to, 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, uh, 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 unprecedented moment. Uh,

that all of us are navigating here. But so far, the signals are that it's going to be a fantastic Prime Day and we're looking forward to having record-setting deals, attracting a record-setting number of Prime members to join Prime like we have 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. 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 sellers is much like where we started this conversation, which is it's a complicated, rapidly changing environment. It's hard to know at any given moment where things stand. But the sellers and vendors we work with 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

We have the selection available, inventory is available, the event is going to be fantastic and every day as well. It isn't just about Prime Day, although Prime Day is really important to them and to us. It's also ensuring we have a good everyday shopping experience on the three aspects that you highlighted before. So 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 since?

Yeah, we haven't we haven't seen anything material in the numbers as yet. There's been there's been sort of like variations that are hard to tell from, you know, like from just normal variations you'd see in the business. I think 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 consumers stocking up to take advantage of deals. I know in my household, I have, you know, an eight-year-old, a four-year-old, and a 10-month-old daughters working.

Our household needs a lot of things to run. 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 family. And so I'd expect that the same will be true 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 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 continue to see strength in the part of the business that's growing the fastest, which is our everyday essentials and our groceries and heavy, which is which is, 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. So that continues to be really robust. And you see strength across businesses.

the store because our prices are very competitive. The speeds continue to be very, very strong. So the business is robust. Prime membership continues to grow all around the world, including the US. So we're seeing resilience as of today. But there's a lot of macro factors on

on 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 this part up and then we can move on to the more fun stuff. It seems like what you're saying is even if we see an enduring trade war, and I'm kind of skeptical that we'll see much more of this,

Amazon should be in a good place because it sources from countries outside of China, because it's able to sort of shift things within the business quickly and could even gain 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 it's a great summary. We have a very resilient business that's focused on first and foremost serving customers. And in doing so, we sort of engineered our business behind the scenes to make that possible. And whether it's trade disruption or the pandemic or economic softness for other reasons, 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. So but that has been that has been what's worked for Amazon for so long. All right. Look, Jamil, this is I know you have to be very careful in some of these answers, like seems like a misreported nugget and punch bowl sent the White House steaming at Amazon just a few hours ago. That being said, 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 alex plus has rolled out for some people but

But not the masses yet. So what's going on with that product? Yeah, it's it's we're we're rolling it out. We're being really deliberate about that rollout. It's like we talked about then and I can overview now. It's an incredibly significant, you know, rethink and rearchitecture of a service enjoyed by consumers.

500, 600 million devices around the world. And so we want to do that really, really well. We don't want to disrupt the experience that customers have come to rely on. The feedback has been positive. We're finishing up the product and we're looking to scale that in the coming weeks to significantly more customers. But it's underway.

We want to get it right. I want to have a superlative experience. So it's going to plan. So I probably should have asked this question when Panos was in. When do you think that we can expect to see a full rollout 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 the full rollout is that months away? Is that next year? What do we what can we expect on that front?

I don't have a specific date to offer you today because we're adjusting the timelines according to the rollout. But it's months. It's not next year. Okay. So this year. What have you guys learned in testing Alexa Plus? I mean, in the early moments, can you talk a little bit about what's resonated? And maybe give a little explanation since I've like now –

you know side of it but let's we could also take a step back and talk about what exactly it's going to do yeah so that's a good place to start um in my own words the way i describe alexa plus it's a it's a it's the new version of alexa

which is much more conversational, much more intelligent, and it's more action-oriented. I can talk about all of those pieces. Conversational in that it can go back and forth with you engaging on a topic of interest, on a task of interest, all the things 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...

been trained on a corpus of knowledge, you know, world knowledge, Amazon-specific knowledge about the product catalog, about Prime Video's catalog, music, et cetera, et cetera. And it's more action-oriented. It can do things on your behalf, whether it's on one end sort of making it really simple to manage your calendar to using –

the other prime benefits, shopping, video, music, et cetera, et cetera, to doing things out in the quote unquote real world, book you an Uber, you know, get you a handy person to come to your house to fix something and everything in between. And so I look forward to telling you about how my household has been using it because it's sort of like they're the best anecdotes of like what we're learning because the bottom line is we're learning that

our customers are using it for a whole host of things. And that's exciting because it is a very flexible, personalized experience, much more so than the classic Alexa. Okay, so how's it coming to use in your family's house? Yeah, so I am married. I have three young daughters, eight, four, and 10 months, like I said before. So let's just say it's sort of like controlled chaos is the way to describe the household to working parents.

And so, you know, I'll give you some anecdotes of real things. Rewind to October. My older two daughters were convinced that they wanted to be ninjas. And so they thought it would be fun to go up to –

Alexa Plus and ask for suggestions on what the baby could be dressed up as. And so they described in their own parlance, 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, his eight year old humor is like, what would be really funny for Juliana to be? And Alexa Plus came back and suggested that the baby should dress up like a sushi roll.

And then I had a clickable link for same day delivery of the costume from Amazon.com. So, 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 a nether costume, which was a little Shogun with a mustache for the baby. I'm,

Like we're rolling here and I'm like, this is great. And we ended up getting the sushi roll and the baby was a sushi roll for Halloween. 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 course of just a couple minutes. Another example.

You know, lots of snacks in our household, as you would imagine, with growing kids. My wife walks out of the cupboards, searching around the cupboards, looking for this particular snack bar that they like called Go Macro Bars. And she turns to Alexa Plus and it's like, Alexa Plus, let's order or Alexa, let's order some Go Macro Bars.

And so responds, it's like, oh, you've previously purchased this flavor. There's also these other two flavors. Oh, that's interesting. Let's do this third flavor. Great. It's like you've previously purchased a six count box. I notice that there are singles and there's also a case. For the other room, I say, oh, how much is the case 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, said, oh, let's get a case of the, I think it's blueberry or something. And let's go ahead and check out. We checked out and it was at our doorstep by 5:00 PM that afternoon. That was like,

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 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 to me because when you talk that 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 companion

Because there are seemingly two different types of ways that people are building this. And I'm 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. It was very interesting. I had like back-to-back conversations with Panos and Daniel talking about Alexa Plus and then Mustafa Suleiman 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 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. I think either can have personality. Alexa has a personality and Alexa Plus, it takes that to the next level. And 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, lots of needs, definitely into wants as well. We can talk about kind of how it makes entertainment better. And others are choosing other paths as a user of other services as well. You know, from my own research and learning standpoint, I recognize the split, but I think it would be incorrect to say that

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 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 what have you or recipes to make at home, she takes that into consideration. That is being very helpful but she does it in a way that it doesn't feel –

It feels very much like integrated into kind of our life. You made a point about the kids conversing there. You know, Alexa Plus also, you know, we have Kids Plus for our kids, which is like books and content and what have you that they enjoy. Yeah.

There's a feature to create stories with Alexa. And we sit and do that, and it lets the kids kind of 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 the time we spend with them. It's adding a new dimension to that time.

at 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 that enables you to do? Ah, thank you for the reframe. I think that the personality is helpful, but I think ultimately

I believe, we believe that Alexa will be 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 get access to the right content. She can help you shop. She can help you do other services. And that list of services will grow and grow with time. You saw some of those in the demo for the early days. 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.

and new devices that are coming 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, I didn't get confirmation, but they just announced shopping this week, so we can assume that it's happening. The shopping integration within ChatGPT at this moment is going to be basically surfacing online.

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 ChatGPT to go make a purchase. But there was also some screenshots of code that may show them 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 a great selection, 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. And people are starting to trust ChatGPT in an interesting but different way, right? It becomes a companion to them. And

There was a Harvard Business Review story recently talking about how the change for chatbots has gone from idea generation to companionship. So what's happening now is ChatGPT is becoming a companion to people. It's their research assistant. It's their conversation partner, which is similar to what you want to do, I think, with Alexa+.

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 ChatGPT because they trust it to do so many things in their life. And then they can go shop through their chatbots. So I'm kind of curious what you think about that and whether you think you might end up seeing ChatGPT kind of enter this game in a way that maybe people didn't previously anticipate.

Yeah, I think about this a lot. I go back to what we have tried to do over the years with Amazon Prime is...

We obviously started in 2005 with 1 million items available in two day delivery. And that was game changing 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 was kind of like the

key friction we all faced. And we removed that friction by saying, hey, don't worry about 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, on basically everything we sold at the time. And we've grown that proposition

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 think

is a companion to so many households, not just here in the US, but over 200 million households around the world, where it's hard to imagine running life without Amazon Prime. And so Alexa Plus being a part of Prime, included no additional cost for our members, extends that idea in the way that you're describing, which is,

whether you shop on desktop or you shop in the mobile app, or increasingly you turn to a voice assistant, whether they're on the Alexa device, an Echo device, or in your pocket. We just want to make it really simple for our members to take advantage of

all that value, right? And so it's not surprising that 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 and no additional

cost if something unfortunately goes wrong that Company standing behind it to make it right which we do with our a to Z guarantee. And so I think It's not surprising that others would go to that space, but it's also Not any one thing that gives the entire prime experience. I think it's a combination of just you know, I

Sorry, the selection, the price and the supply chain invention that has happened over 25 years to have – last year we delivered 9 billion items same day or next day, 9 billion items.

In delivery fees alone, US Prime members last year saved $500. That's multiples of what you pay for the membership. All of that is what's sitting behind Alexa Plus and the utility and the aid it's seeking to bring. And so 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 may have echoed your words there. But I do think, like, I think about my own household, you know, not to be too much information, but like, 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 realized that I forgot to get

diapers. Like it makes life possible. Call it a companion, call it 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 back in 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 live in a diverse world with a lot of interest and a lot of technology being used in a lot of different ways. I do think folks will turn to chatbots for all kinds of needs, including companionship.

including, you know, a sounding board, including all those. I think all those things are possible. Our take on Alexa Plus is we want to be, you know, conversational, intelligent, helpful assistant to folks taking advantage of all the benefits that Prime offers and more. But if people are going to be friends and 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.

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 chat bot, or maybe it's a voice bot in its next iteration, 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 a completely new front that Amazon didn't have to deal with before.

Well, yes and no. Like, I know it's not quite the same thing, but you think about folks were making predictions about, you know, the rise of e-commerce. It's like, oh, this is the end of physical retail. That hasn't happened. 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 a companion or kind of like relationships or preferences, you know, that will that will impact.

shopping choices and choice of you know where they get their entertainment happy 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 to make sure that their value is clear to the customer so I I think yes and is 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 and

If the next iteration of the web, there's a chance that it might be is through these chatbots. Could you see a world where Amazon, let's say, partners with OpenAI to bring Amazon shopping into ChatGPT? Or does Alexa Plus prevent you from doing something like that?

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 with Prime. We're working with third-party direct-to-consumer sites to bring the same Prime delivery experience to third-party sites.

Like you could have rewound the clock five years ago and asked a question like, would we ever do that? And I'd probably give you the same answer, which is I can't comment on anything we might do in the future. But you fast forward today and we want to make it easier for –

customers and members to shop wherever they want to shop. In addition, we're now surfacing a product that's on third-party sites not listed on Amazon's marketplace so that if you're searching on Amazon.com or in the app for XYZ brand and we don't happen to carry it, we can facilitate you finding that and going and shopping for it. So I think this will continue to evolve.

Going forward, we do think that the combination of offerings we have, we want to earn the business from customers directly. You know, that's really important to us as it is to every company. And 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 to share with you today, Alex.

Okay, I'm sorry. Much as you would want me to. Much as you would want me to share. Just my job as a reporter to ask, but I respect you. I get it. 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 you personally think that generative AI is going to be a new 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 will remain the same, but I don't think it's going to ingest the web.

I think, again, I'm a big believer that A does not become B. A and B come together to turn into this really interesting new C because there's just lots of inventiveness going on. Yeah.

I think that there will be elements of the day-to-day customer experience that will be fronted by Gen AI very strongly. I think a lot of productivity, knowledge work will have like a sort of a

persistent assistant to help with a lot of that work. Then I think other elements will be more classic web, if you can call it that. Just like there's a big space in the retail space for walking into a store and having 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 health care and all the other aspects of the prime program. OK, I just have one more Alexa plus question, and then we're going to go to a quick break and talk about anthropic and some infrastructure stuff.

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 their hands. Now, of course, there's a minimal rollout at this point, but just assure us, is this thing going to deliver? I think so. Having used it now since late last year, it is a step change experience from Alexa. And Alexa is fairly integrated into my household with smart home and, you know, applications.

access to entertainment, et cetera, et cetera. Um, this is a step change experience. Um, it, uh, it's taking advantage of, as Pano said in the, in the, uh, demo back in February, um, it's like the technology is 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 and 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 the new Alexa can do on the newest devices. And so, you know, where we start will not be certainly where we end. And so I do have high hopes for, you know, how valuable it's going to be to customers.

Okay, 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.

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And we're back here on Big Technology Podcast with Jamil Ghani, the VP of Amazon Prime. Where to start, Jamil? Okay, let's talk about infrastructure. There was a sense during the pandemic that Amazon kind of overbuilt infrastructure.

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. The idea was that that was a little bit too much 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, 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 a 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 became indispensable for all of us around the world. And so we built up our warehouse capacity really, really rapidly. Like you said, of course, then, you know, as a lot of businesses, there was a slowdown as the, you know, the

the world opened up and so on and 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've continued to invest in robotics.

and keep on making our supply chain 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. And that has sped up our speeds and also reduced our cost to serve. And so we've seen a lot of goodness in terms of the investments we've made. 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. I spoke with someone who used to work with Amazon, who's like basically said that I'm going to relay this in a less politically correct sentiment, but he was like, yeah,

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 North Face, North Faces are popular and people like to windsurf. 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 that's spun a certain way. Here's what I would say. We apply, and we've been since the very beginning, we've been applying machine learning and advanced AI to better...

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 the slower moving certain inventory that is fast moving is more decentralized closer to the customer. You know certain parts of the country. I grew up in Miami Florida.

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 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 my articulation. We do that with machines that help us do that at scale and do that efficiently. And like I said, get a better cost to serve, which we then pass on to customers through fast speeds.

Right. Yeah. Hands off the wheel was the initial program that I reported on deeply in my book. It continues to be our mantra of like to operate at our scale and our SLAs and our customer bar, 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 applied...

the latest technologies on machine learning and otherwise 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 racks around a fulfillment center, but actually pick the products out of the racks themselves.

and then maybe even pack them. 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. How far is Amazon or how far do you think the industry is from creating robots that can effectively pick those products?

So I'm not a roboticist, first thing. Although I did stay at a Holiday Inn Express last night. No, in all seriousness. That's where it all happens. So I can't tell you how close or how far we are. I know that our latest gen robots

fulfillment center uses robotics in a whole host of ways, including sort of organizing on the belts and what have you. You know, our vision is robotics and automation coexisting with

sort of serving customers. And so, you know, we're really thoughtful about where we apply automation, where we apply robotics to make sure we have a safe working environment for all of our associates. And so, like, we're going to continue innovating and, you know, periodically we're releasing sort of the next gen fulfillment center. And as we build them out, we will apply the latest technology available.

But I can't say how close or how far we are to any particular milestone.

Yeah, last week I was at I met the co-founder of this company, Cobot, who was actually in Amazon fulfillment for quite some time. And they have these like robots that look a little bit like the FC robots, 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 places like shipping terminals. So it's really remarkable. It's really remarkable.

Well, how fast it's coming along. And I think that's a whole nother kind of angle on the application of the advanced kind of learning techniques and ML and AI. And so we're excited about it. And we've been investing in robotics in our fulfillment centers for years. Right. And so this is just kind of continuing down the path, certainly accelerating now.

Yeah, I've had a chance to come into a couple of fulfillment centers and see them at work, and it's pretty amazing. So let's end with Anthropic. Amazon, of course, has a very close partnership with Anthropic, billions of dollars in

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 Krieger, the head of product at Anthropic there. 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 application that they have, Claude.

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. Obviously, it was highlighted in the Alexa Plus event, but we're working with Anthropic on other parts of the store's business and other parts of the business as well. So, like, nothing to announce with Claude. They're great.

consumer facing bot, but Anthropic is a close partner of ours on various parts of the business, even beyond Alexa Plus. Okay. So let's round out with this. 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.

How did you come up with that? Because Prime costs $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, we on 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 things in a bunch of ways you and i've 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 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've 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 in finding exactly the right mood music in you know in

natural language, just like going back and forth. This is a 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 folks will check out Prime because it's going to be, you know, get them Alexa Plus, but a whole lot more as well. And 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.

We have over 200 million members in 25 countries. Yeah, 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 focused like always on adding more and more value and then periodically we examine the price, but nothing to share.

Well, Jamil, 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 tremendously. Thank you for coming on. Thank you for telling us more about everything going on with Alexa Plus, with Amazon and for fielding the questions and for respectfully taking some of my reporter digging and not getting mad at me. So thank you for that. 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?

They can go to Amazon.com and search for Alexa Plus and they can land and learn all about its capabilities. Okay, awesome. And I definitely recommend people check out the interview I did with Panos Pene a couple of weeks ago. And Daniel Rausch 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 Ranjan Roy to break down the week's news. Until then, we'll see you next time on Big Technology Podcast.