Gerstner cites Amazon CodeWhisperer reporting 56% increase in engineering productivity from AI coding tools.
“I think Amazon CodeWhisperer, so this is a cogeneration copilot Mhmm. Is reporting that they've seen 56% increase in engineering productivity”
Gerstner forecasts Microsoft, Amazon, and Snowflake will accelerate growth rates, calling this unprecedented at their scale.
“We expect our forecast is that Microsoft and Amazon, you know, Snowflake, they'll all accelerate their growth rates this year. Right?”
Gerstner says he was concerned a year ago that Microsoft's OpenAI partnership would cause Amazon customers to switch to Azure.
“A year ago, I was concerned and some others were whether or not Microsoft's early lead because of their partnership with OpenAI would cause a bunch of customers to leave Amazon and go to Azure in order to take advantage of the benefits of OpenAI.”
Gerstner says Amazon saw almost no customer churn to Azure despite Microsoft's OpenAI partnership advantage.
“A year ago, I was concerned and some others were whether or not Microsoft's early lead because of their partnership with OpenAI would cause a bunch of customers to leave Amazon and go to Azure in order to take advantage of the benefits of OpenAI. We didn't see that. We saw almost no customer churn.”
Gerstner notes Amazon bought land near nuclear facility while 30-35% US production comes from independent sellers.
“And, once again, according to Phil, about 35%, 30% of the production in The US is from independent energy producers who who basically sell to whoever they decide they want to sell to.”
Gerstner praises Jassy's efficiency focus at Amazon retail, expects margin expansion as investment thesis.
“Why are we in Amazon? Because we think the retail businesses margins are gonna go up. Jassy has absolutely found religion.”
Gerstner says Amazon CEO Jassy is aggressively focused on running the retail business efficiently.
“Jassy has absolutely found religion. He's in animal mode when it comes to making sure that they're running that as efficiently as possible.”
Gerstner earned 100x returns on Amazon in public markets, returns now going to private investors instead.
“So I earned a 100 x return in the public markets. Right? By all accounts, venture capitalists would do back flips for that return, but those returns were going to private market participants.”
Gerstner recounts Amazon peaked at $243 in 1998, fell to $26 after Blodgett's $400 call.
“Amazon, if you recall, Bill, and I know you do, it peaked at $243 a share in 1998. But at the start of 2000, it's at $150 a share.”
Gerstner says Amazon is up 200x from 2000 peak and 1000x from 2000 low on split-adjusted basis.
“On a split adjusted basis, where is Amazon today relative to that $150? It's up 200x. Where is it relative to where it was in December 2020? Up 1000x.”
Gerstner references Henry Blodgett's $400 Amazon call in 2000 as historical precedent for AI investments.
“I talked about Henry Blodgett's 400 call on Amazon back in 2000. Right? What do you think Amazon is today relative to the $400 call that Henry Blodgett made in 2000?”
Gerstner says Amazon is up 87 times from Henry Blodget's ridiculed $400 call in 2000.
“He got ridiculed and laughed off of Wall Street for it. But Amazon is up 87 times today from where it was when he made that call.”
Gerstner notes Amazon is up 87x since Blodgett's 2000 call, validating long-term thinking.
“Amazon is up 87 times today from where it was when he made that call.”
Gerstner reports Andy Jassy said Amazon has demand it cannot fulfill.
“Andy Jassy said last night that he has demand coming in over the bow. He can't fulfill the demand.”
Gerstner uses Amazon-Walmart coexistence to argue disruption does not mean zero-sum destruction.
“if you go back to 2000, remember, there were concerns that Amazon was gonna destroy Walmart.”
Gerstner offers condolences on Owen van Natta's passing and praises his tribute
“@DanRose999 @Scobleizer It sucks Dan. Beautiful tribute. He was always laughing. He would be telling us - one precious life don’t waste it. 🤍🙏”