Amazon Cloud Chief Confident in AI Investments Amid $14K Job Cuts and $11B Data Center Launch

Amazon’s cloud chief, Matt Garman, says the company feels “quite good” about its massive AI investments, despite growing concerns that the current AI boom could be overheating. In an interview with CNBC Television, recorded on October 17 and published Wednesday, Garman emphasized Amazon’s disciplined, long-term approach to AI, contrasting it with what he described as more speculative bets by others. “Others may have maybe more speculative investments,” he said. “We're very intentional about how we think about leveraging risk and thinking about how we have the long-term view of what this business looks like.” The comments come as Amazon officially activated Project Rainier, its $11 billion AI data center in rural Indiana. This facility is one of the largest of its kind, dedicated to training and running AI models developed by Anthropic, a key AI partner of Amazon and a direct competitor to OpenAI. Over 500,000 AWS Tranium 2 chips have already been deployed at the site, which is now fully operational and expected to double in size by the end of the year. Garman revealed that AWS has invested nearly $100 billion in capital expenditures over the past year to build out AI infrastructure. This massive spending underscores Amazon’s commitment to maintaining its leadership in cloud computing and AI. The announcement coincides with Amazon’s latest round of corporate layoffs, affecting 14,000 employees—about 4% of its roughly 350,000 corporate staff. The company has 1.55 million employees globally. Amazon’s senior vice president of people experience and technology, Beth Galetti, explained in a blog post that the workforce reductions are part of a broader effort to streamline operations, reduce management layers, and accelerate innovation. “Amazon needs to have fewer management layers to move faster,” she said. The company is reallocating resources to focus on its most strategic initiatives, cutting back in some areas while hiring aggressively in others. This shift follows years of restructuring, including the elimination of unprofitable projects, cost-cutting measures, and a return-to-office mandate requiring most corporate staff to work in person five days a week. CEO Andy Jassy has previously stated that AI-driven efficiency gains will continue to reduce headcount. Earlier this year, Amazon froze hiring in its retail division, and AWS also underwent layoffs in July. Amazon is not alone in its workforce reductions. Microsoft announced plans in July to cut about 15,000 roles to prioritize security, quality, and AI transformation. Meanwhile, Meta recently announced cuts in its risk organization, replacing many roles with automation technology.