Amazon Web Services (AWS) has announced a series of changes to Amazon OpenSearch aimed at streamlining data log analysis.

A new purpose-built log analytics engine for the service will provide users with marked performance gains and up to 70% lower storage costs, according to the firm.

OpenSearch allows users to search, analyze, and visualize data in real-time, and is typically used for application monitoring, observability, and AI/ML search applications.

The hyperscaler said the update comes in direct response to surging volumes of log data handled by enterprises in 2026, largely due to AI.

Research from AWS shows that log volumes have grown between 30-40% year over year, which is stretching budgets and creating bottlenecks.

Amazon OpenSearch overhaul

As part of the update, Amazon revealed OpenSearch will now store data in the Apache Parquet format. This is a column-oriented data file format designed specifically for more efficient data storage and retrieval purposes.

The service previously relied on inverted indexing. Amazon noted the shift will deliver significant efficiency gains and faster search and retrieval capabilities.

“Apache Calcite parses and optimizes each query, then routes operations to the engine best suited to execute them: Apache DataFusion for analytical operations on columnar data, or Lucene for search predicates,” the company explained in a blog post.

“The two hand off mid-query, so a single query can search log content and aggregate the results without additional roundtrips.”

Amazon noted that OpenSearch now also supports the Piped Processing Language (PPL) and SQL query languages, both of which “execute natively” through the platform.

Amazon eyes optimized log analytics

From a performance perspective, Amazon noted users can expect significant improvements alongside lower costs.

OpenSearch now boasts up to four-times price improvements compared to the existing engine, based on internal benchmarks.

Users can also capitalize on two-times faster analytics queries due to the fact the engine processes data in columnar batches, even across larger data sets. A two-fold improvement on ingestion rates also aims to reduce bottlenecks.

“The optimized engine sustained 1.78 million documents per second at matched concurrency, approximately 2x the throughput of the Lucene baseline, while consuming less CPU,” the hyperscaler explained.

“Both domains ran with zero write rejections. For teams ingesting terabytes per day, the throughput advantage translates to fewer nodes for the same volume, or longer retention on the same infrastructure.”

How to access Amazon OpenSearch

The new log analytics engine is available now for enterprises in AWS regions where OpenSearch Optimized instances are supported, the company noted. Similarly, there will be no additional premium for the optimized engine.

It’s worth noting that the new engine is a setting selected at creation time, meaning users can’t add this to an existing domain or enable it within individual indices or fields within a general-purpose domain.

“To adopt the optimized engine, create a new domain and migrate your ingestion pipelines into it,” the company explained.

“Create a new domain in the Amazon OpenSearch Service console and select Observability as your use case. The optimized engine is enabled by default.”

The in-built console will provide users with a side-by-side comparison of capabilities based on individual needs.

“After your domain is ready, ingest JSON documents through the same Bulk API and client libraries you use today. No changes to your ingestion pipelines or application code are required.”

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Amazon Web Services (AWS) has confirmed a recent outage that impacted customers was caused by overheating at a North Virginia data center.

The disruption affected one of AWS' six Availability Zones, use1-az4 in the AWS US-EAST-1 region. This is one of the company's most heavily used regions globally.

Notably, the incident hit platforms including cryptocurrency exchange Coinbase, disrupting core exchange functions for more than five hours. Other reported victims include the CME Group trading platform and major gambling company FanDuel.

Coinbase last night warned that some users might experience delayed sends and receives on the Solana network and for ALEO, but said it was working on the issue.

The crypto trading platform has since resumed operations. In a statement, Coinbase said: "All markets have been re-enabled for trading on coinbase.com and in the Coinbase iOS and Android apps. Coinbase customers can log in to trade."

FanDuel, meanwhile, posted a statement on X, saying it was working to troubleshoot the issue. "Our team is aware and investigating the current technical difficulties prohibiting users from accessing our platform," it said.

Overheating behind AWS outage

In an update to customers, AWS attributed the cause of the outage to overheating. The hyperscaler is yet to confirm how the overheating occurred.

"We have experienced an increase in temperatures within a single data center, which in some cases has caused impairments for instances in the Availability Zone," AWS said in a status report.

"EC2 instances and EBS volumes hosted on impacted hardware are affected by the loss of power during the thermal event."

In its latest update, AWS said it had shifted traffic away from the impacted zone. The hyperscaler said it was still carrying out mitigation efforts.

These are taking longer than expected to bring additional cooling system capacity online and recover the remaining affected infrastructure safely and in a controlled manner.

AWS warned some customers will continue to see their affected EC2 instances and EBS volumes as impaired until it can achieve full recovery. It said it currently didn't have an ETA for this.

What services are back online?

A number of services are back online following the outage, according to the hyperscaler. This includes:

• AWS IoT Core
• AWS NAT Gateway
• Amazon Elastic Kubernetes Service
• Amazon Elastic Load Balancing
• Amazon Redshift

Some services are still impacted at time of writing, including:

• Amazon ElastiCache
• Amazon Managed Streaming for Apache Kafka
• Amazon OpenSearch Service
• Amazon SageMaker

Yet another AWS outage

It's not the first time that a major AWS outage has caused chaos. Last year, hundreds of apps and websites including Slack, Zoom, Coinbase, Snapchat, and Signal were taken down in a global outage.

Banking applications including Lloyds and Halifax also saw customers unable to access services. On that occasion, AWS attributed the outage to a DNS issue.

The incident highlights the extent to which major websites and apps are dependent on just a few tech giants.

In 2024, for example, issues with CrowdStrike saw hospitals, banks, and airports in Australia, New Zealand, India, Japan, the US, Germany, and the UK seriously affected.

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AWS CEO Matt Garman has a bullish outlook on the future of the SaaS industry despite continued claims of a looming “SaaSpocalypse”.

Speaking during a recent interview with Fortune, the AWS chief dispelled worries that the SaaS industry faces an existential threat in the form of agentic AI - so much so that the company is making its own foray into the space.

Last week, the company unveiled sweeping changes to Amazon Quick, a desktop AI assistant which acts as a single information source connecting the disparate applications, tools, and data used by workers in their daily lives.

AWS is framing the revamped platform as a boon for personal productivity, noting in an announcement that it is “continuously running in the background” monitoring desktop activities and “surfacing what needs attention”.

As the company explained in a blog post, this could include information contained in Slack threads, for example, or important unread emails and file uploads.

AWS’ foray into this domain was inspired by the fact that “so many applications are getting done with AI and agents”, according to Garman, who described Amazon Quick as a “huge business opportunity”.

“We think that there is just such a massive change out there that everything is going to be remade,” Garman told Fortune. “I don’t think personal productivity has really been remade for the last 30 years,”

“There are going to be millions of successful applications that people use,” he added. “Obviously the vast, vast majority of them will not be built by Amazon or AWS, but we think there are a handful of them that we can build that will be pretty successful and that customers will like.”

Garman’s comments suggest that, far from heralding the doom of traditional software, AI will ultimately act as an enabler to deliver more intuitive workplace tools.

This isn’t the first time Garman has poured cold water on threats of a pending SaaSpocalypse. As ITPro reported in February this year, Garman said while there is “huge disruption” ahead for the SaaS industry, “much of the fear is overblown”.

Garman’s comments came at the peak of software stock sell-offs sparked by the launch of a handful of powerful new AI solutions, with Anthropic’s Claude Cowork tool ranked chief among these.

The workplace productivity tool gives users sector-specific plugins designed to automate tasks across a wide range of areas, spanning legal, marketing, sales, and data analytics.

That launch spooked software investors due to fears the technology could ultimately render dedicated SaaS solutions in these domains obsolete.

AI transforming software

Despite a positive outlook, Garman told CNBC in February that the advent of generative AI, and more recently AI agents, will transform how software is built and sold.

Long-term, that could create a more challenging market for providers, who will be operating in an increasingly competitive marketplace.

“AI is absolutely a disruptive force that’s going to change how software is consumed and how it’s built,” he said.

“The SaaS providers and the larger players of today have an inside track to winning that business. Now, they have to innovate, just like the rest of the world. They can’t stand still. If they stand still, they’re absolutely going to be disrupted.”

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Hyperscaler cloud revenues are still surging, according to recent earnings reports, but questions still remain about how much longer they can continue investing massive sums in AI infrastructure.

Alphabet, AWS, Meta, and Microsoft have all posted positive results this quarter with overall revenue in the hundreds of billions of dollars, helped in part by booming demand for data center capacity amid the AI roll-out.

However, analysts have questioned whether spending on AI is sustainable and will deliver a return on investment (ROI).

The current estimate is for tech's leading companies to invest $600 billion in infrastructure to power AI this year alone, with some tech giants already upping their predicted spends as part of their quarterly results.

"The public cloud platform earnings numbers are big as usual — but the capital investment to achieve them are getting big faster," said Forrester’s principal analyst Lee Sustar. "That's why questions will persist about the sustainability of hyperscaler AI data center buildouts."

"Together, the public cloud revenue numbers and the capital expense figures will raise questions about the sustainability of the AI boom," he added. "But with the potential payoff of AI leadership seemingly so high, the companies continue to make those bets, forcing investors and customers alike to assess how their interests are impacted."

According to LSEG data shared by Reuters, Amazon stock is up 13%, Alphabet's is up just shy of 12%, and Meta is up 3% – but Microsoft has slid 12%.

Alphabet's cloud success

Google-owner Alphabet saw overall revenue leap 22% to $109.9 billion for its first quarter, topping estimates, with income climbing to $39.7 billion.

Google Cloud climbed 63% to $20 billion, marking the best growth rate for the cloud company in more than six years, though still below Alphabet's other revenue sources, including Services at $89.6 billion and Search at $60.3 billion.

Google Cloud income climbed from $2.2 billion in the first quarter in 2025 to $6.6 billion this year, underlining significant growth over the last 12 months. Sustar said the figures show the cloud division "can significantly contribute to the wider Alphabet portfolio after years of big operating losses".

In an investor call, Sundar Pichai said that capacity constraints prevented even higher growth, with Google Cloud's backlog doubling to $460 billion.

"Our enterprise AI solutions have become our primary growth driver for cloud for the first time," he said.

In a statement, Pichai added: "Our first-party models, like Gemini, are now processing more than 16 billion tokens per minute via direct API use by our customers, up 60% from last quarter. It’s really exciting to see how our AI investments are delivering value for our users, customers and business."

CFO Anat Ashkenazi said Google would increase its capital expenditure forecast by $5 billion to somewhere between $180 billion and 190 billion. Last year, the tech giant’s capital expenditure reached $91.45 billion, with much of this focused on AI-related spending.

That huge cloud backlog and leap in revenue suggests that Google's capex spending isn't wildly out of place, Thomas Monteiro, a senior analyst at Investing.com, told Reuters.

"Perhaps even more importantly than Alphabet's massive cloud growth pace is the broader justification that the $180 billion capex plan — that surprised the market last quarter — is well within the company’s spending power, considering the durability and quality of the revenue curve shown today," he said.

But concerns remain, according to Sustar, who pointed to the quarterly figures. He noted that "the capital expenditure of $35.7 billion — which Alphabet attributes largely to AI — is much bigger" than the $20 billion in quarterly revenue from the cloud unit.

AWS leaps ahead, but not quite as much

Amazon's overall revenue climbed 17% to $181.5 billion in the first quarter, while revenue at Amazon Web Services (AWS) climbed 28% to $37.6 billion in the first quarter. AWS operating income climbed to $14.2 billion from $11.5 billion in the same quarter last year.

While AWS’ revenue growth rate wasn't as high as Google Cloud's, it's still significant coming from the market leader. Andy Jassy, CEO of Amazon, said in a statement that it was AWS' "fastest growth in 15 quarters."

Jesse Cohen, senior analyst at Investing.com, said that the "reacceleration" in AWS sales was a positive sign, adding that the hyperscaler’s customer base is "fully embracing new workloads, especially in AI."

Amazon has projected $200 billion in capex this year, with $44.2 billion spent in this quarter.

"AWS bagged $37.59 billion in revenue in the first quarter but data center buildouts accounted for a big part of the $44.2 billion capital investment in the same period, even though AWS had an operating income of $14.2 billion," said Sustar.

"That puts pressure on AWS to keep up its historic role of keeping Amazon as a whole in the black from quarter to quarter.

Social media props up Meta

Facebook owner Meta posted revenue of $56.3 billion, up 33% from $42.3 billion the same quarter last year, with income of $22.8 billion, up about 30%.

Meta raised its expected capital expenditure forecast from between $115 billion-$135 billion to $125 billion-$145 billion, which sent stocks sliding 6%.

In a statement, Meta said: "This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity."

In a conference call, Meta's chief financial officer Susan Li said that such spending was necessary to catch up, as Meta has previously "underestimated our compute needs".

CEO Mark Zuckerberg said it was unclear how the increased spending would pay off.

"I don't think we have a very precise plan for exactly how each product is going to scale or anything like that," he said, per reports from the BBC.

"But I think we have a sense of the shape of where these things should be... and I'm quite comfortable that the lab we're building is on track to be a leading lab in the world."

In the meantime, social media continues to pay Meta's bills.

“The irony is that Meta’s future‑facing AI ambitions are being underwritten almost entirely by the company’s legacy business: advertising inside social media apps," said Forrester’s VP research director Mike Proulx. "There’s no material AI revenue yet. Reality Labs remains a loss. Muse Spark has momentum, but not monetization."

“The question is whether Meta’s core can continue to act as a cash cow while the company reduces headcount and diverts focus toward AI," he added.

"If Meta’s ad engine slows, the market’s margin for patience shrinks fast. Meta’s slight dip in daily active users is already beginning to raise eyebrows. Q2 will tell us if it’s really just a blip or the start of a trend."

Microsoft says margins are strong

Microsoft said its quarterly revenue was up 18% to $82.9 billion, with operating income up 20% to $31.8 billion, though AI spending helped cash flow slip by $6 billion to $15.8 billion.

"We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era," said Satya Nadella, Microsoft CEO.

"Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year."

Microsoft Cloud revenue climbed 29% to $54.5 billion, with Azure and other cloud services up 40%.

"For its part, Microsoft claims an upswing of 40% growth in Azure and $54.5 billion in revenue for the wider Microsoft Cloud category," said Forrester's Sustar.

"The company does not break out Azure operating revenue, but with its AI-focused capital investments of $31.9 billion, the cloud revenue is clearly expensive to obtain."

Microsoft's spending on AI has raised concerns, but the company pushed back saying income remains strong. "The margins have been and remain better in our AI business than when we were in our cloud transition," said CFO Amy Hood.

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The Competition and Markets Authority (CMA) has launched an investigation into Microsoft’s software licensing practices due to competition concerns.

A strategic market status (SMS) investigation will begin in May and see the regulator examine the tech giant’s licensing practices in relation to Microsoft 365.

The business software suite includes a host of popular applications, including Word, Excel, and Teams.

Sarah Cardell, chief executive of the CMA, said an SMS designation would allow the regulator to “tackle remaining concerns around Microsoft’s licensing practices” and “ensure a level playing field as AI is rapidly embedded into everyday business software tools”.

An SMS designation is a label applied by the regulator to technology providers that hold a disproportionate influence on certain markets - in this case, business software.

AI interoperability in the crosshairs

Notably, the regulator specifically highlighted the emergence – and interoperability – of AI tools such as Copilot as a key focus of the probe.

This aspect of the investigation comes amid the rapid adoption of AI tools by public and private sector organizations across the UK. Microsoft, in particular, has positioned its Copilot services as a core application in its business software estate.

“The implications are significant for UK productivity, competitiveness, and value for money across the private and public sector,” the CMA said in a statement.

“The UK will benefit most where a broad range of competitors can integrate with Microsoft’s business software, so that businesses and public sector organizations can mix-and-match AI software across suppliers to best suit their needs.”

Microsoft, Amazon cloud licensing changes

The launch of the probe comes after Microsoft and Amazon both agreed to address competition concerns surrounding cloud services.

The two hyperscalers have been subject to a long-running investigation by the regulator over their dominant positions in the UK cloud computing market.

Key issues such as interoperability and “egress fees” – which place high costs on customers transferring data to other services – were highlighted in the probe.

Last year, the CMA concluded the duo’s dominance actively harmed competition in the country’s cloud computing market – a ruling that prompted a fierce reaction.

“Both firms are taking material steps to lower egress fees and improve interoperability, including as reflected in announcements the firms are issuing today,” the CMA said in a statement.

“These actions create benefits for UK businesses, enabling greater scope for multi-homing to support customer choice and the resilience of UK tech stacks.”

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Amazon’s strategic partnership with OpenAI is a win-win for the duo, according to analysts, as the companies forge closer ties on infrastructure and AI development.

The pair announced a multi-year deal last week that will see Amazon invest $50 billion in the AI developer, building on a £38 billion pledge made in November last year.

As part of the deal, OpenAI will lean heavily on AWS infrastructure, committing to deploy 2 gigawatts of Trainium chips for its new enterprise-focused platform, Frontier. AWS will also serve as the exclusive third-party cloud distribution provider for Frontier.

OpenAI’s Frontier platform allows businesses to build and deploy AI applications and agents. As ITPro reported last month, the platform is a key focus for the firm as it looks to ramp up enterprise adoption rates.

The company has since brought in consultancies to act as systems integrators for customers to streamline adoption processes.

Elsewhere, the deal will see the duo create a ‘Stateful Runtime Environment’ through Amazon Bedrock, again with a focus on development and deployment. This will allow AWS customers to build generative AI apps and agents at “production scale”

“Stateful developer environments are the next generation of how frontier models will be used, seamlessly enabling models to access elements like compute, memory, and identity,” AWS said in a statement last week.

“A Stateful Runtime Environment allows developers to keep context, remember prior work, work across software tools and data sources, and access compute.”

Mutually beneficial ties

From Amazon’s perspective, the partnership allows the hyperscaler to continue pushing ahead with its “go build it” approach to AI, according to Lee Sustar, principal analyst at Forrester.

Amazon’s AI strategy has centered largely around its Amazon Bedrock service, which allows customers to build and deploy AI solutions in a similar vein to OpenAI’s Frontier. It has since built on this with the launch of AgentCore, enabling enterprises to create custom agents.

With OpenAI’s sharpened focus on enterprise adoption, this represents a mutually beneficial partnership aimed at both pushing broader enterprise uptake while helping AWS capitalize on lucrative infrastructure deals signed by competitors.

“The OpenAI-AWS deal is the latest example of the hyperscalers’ complicated dance with the big AI players,” Sustar said. “AWS has doubled down on its traditional “go build it” approach with AI, which means it must have partnerships like this.”

“Notably, it gives AWS exclusive third-party cloud distribution with OpenAI Frontier, potentially giving AWS a competitor to Azure OpenAI Services as well as Google Cloud offerings,” he added.

Diversification continues

OpenAI’s Trainium commitment marks a huge win for AWS, Sustar noted, allowing the company to “build a rival GPU ecosystem alternative to Nvidia”.

Like Google, Amazon has invested heavily in its in-house chip capabilities over the last five years in a bid to reduce reliance on Nvidia hardware.

The move also highlights OpenAI’s continued efforts to diversify infrastructure and hardware options.

OpenAI’s once-exclusive ties with Microsoft saw it lean heavily on Azure infrastructure, but over the last year the company has secured a slew of agreements with industry stakeholders on compute capacity and chips.

The company signed a landmark deal with Oracle on compute capacity, for example, while October saw it sign a multi-billion dollar deal with AMD to use six gigawatts of AMD GPUs.

In the wake of the Amazon agreement, Microsoft and OpenAI issued a joint statement insisting the partnership remains “strong and central”.

Amazon is hedging its bets

While OpenAI is diversifying its infrastructure partners, closer ties with Amazon also highlight the latter’s efforts to broaden its own AI partners.

Anthropic, for example, initially acted as Amazon’s champion in a similar light to the relationship between OpenAI and Microsoft.

Amazon, along with Google Cloud, has invested heavily in Anthropic over the last three years through multiple funding pledges. The company’s Claude models are also used extensively by the hyperscaler, powering products such as Alexa+.

While the deal might have raised questions about the ongoing relationship with Anthropic, Amazon CEO Andy Jassy poured cold water on any speculation last week.

Speaking to CNBC, Jassy said the current deal with OpenAI won’t change relations with the firm's long-time competitor.

“That relationship will stay strong, and we’re really excited about the partnership we’re building over a long period of time with OpenAI,” he told the broadcaster.

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Efforts by Amazon Web Services (AWS) to expand data center infrastructure across Europe face severe delays due to sluggish grid connection practices, a senior company figure claims.

In a recent interview with Reuters, Pamela MacDougall, AWS’ head of energy markets for EMEA, said the length of time it takes to get a connection to energy grids had become a major factor when deciding where to invest in new infrastructure.

Indeed, she said delays in Europe had hampered plans by the company to build data centers in high-demand regions, warning that delays were “challenging our growth aspirations."

"There's a misalignment. We want to expand and grow within two years,” MacDougall said. However, the AWS exec noted that grid connections can take up to seven years in Europe.

Last year, power constrains forced AWS to reportedly scrap plans for an industrial plant in Ballycoolin, Ireland that was going to build server racks.

Data from the International Energy Agency (IEA) shows that securing a grid connection ranges from two to ten years, depending on the country. MacDougall added that the problems weren't limited to a few countries.

"We're finding more and more across Europe that certainty of the delivery date has continued to be delayed."

An AWS spokesperson told ITPro it’s charging with plans to "rapidly expand its infrastructure across Europe, with ongoing investments in edge locations and data center regions in more than 20 countries”.

“We remain committed to expanding at pace to meet growing customer demand,” the spokesperson added.

Figures published as part of Amazon's Q3 2025 earnings report revealed the firm had added more than 3.8 gigawatts of power in the 12 months prior. The spokesperson told ITPro it plans to continue adding capacity across 2026 and into 2027.

AWS isn’t alone in grid woes

The IEA noted last year that the data center project pipeline equals 130% of existing capacity – but based on its own modelling, capacity will likely grow by just 70% because of delays and power constraints.

One solution is building data centers in regions with existing grid capacity, rather than focusing on existing hubs as is normally the case. The IEA added that smart grid tech can help boost capacity while battery systems can help balance demand, but noted that further investment in transmission infrastructure remains necessary.

Indeed, it's not just Europe that is struggling to keep up with data center power demands. The US is also facing "significant concerns" over the impact of data center growth on regional energy grids.

In the UK, the situation is much the same. In 2024, former National Grid CEO John Pettigrew called for "bold action" to boost energy infrastructure to keep up with surging power demands.

"Future growth in foundational technologies like artificial intelligence and quantum computing will mean larger scale, energy-intensive computing infrastructure," Pettigrew told attendees at the Aurora Spring Forum in Oxford.

This predicament for big tech shows no signs of improving any time soon, either, and experts have warned aging energy grids could pose a serious challenge to ambitious infrastructure projects.

Two-fifths of data centers have faced power constraints, according to research from Gartner, while analysis by McKinsey projects data center energy demands to triple by the end of the decade.

Big tech courts alternative energy sources

Big tech companies such as AWS, Microsoft, and Google have all been exploring alternative energy sources to power infrastructure projects.

While renewables have been a long-term focus for cloud computing providers, the advent of generative AI – and the associated pressure on data center infrastructure – brought nuclear power back into vogue.

AWS, for example, shelled out $650 million for a data center co-located with a nuclear power plant – though the project faced significant pushback from regulators.

Elsewhere, Microsoft signed a 20-year power purchase agreement (PPA) with energy provider Constellation in a move that will power data centers with nuclear energy.

The partnership involves the reopening of ‘Unit 1’ of the ‘Three Mile Island’ site in Pennsylvania.

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Amazon’s rumored OpenAI investment plans have drawn criticism from analysts amid suggestions the move shows a “lack of confidence” in its own in-house AI model range.

According to reports from the Wall Street Journal, the hyperscaler could invest up to $50 billion in the AI company as part of a multi-stage funding round which includes backing from Nvidia, Microsoft, and SoftBank.

While exact details on the funding remain unclear, OpenAI has been seeking suitors for an additional $100 billion in investment, largely to fund future infrastructure projects.

Amazon boasts close ties with Anthropic, a key competitor for OpenAI in the generative AI space. Amazon Web Services (AWS) has served as the company’s primary cloud provider since 2023, and in 2024 signed a fresh agreement to become the firm’s primary training and inference partner.

In recent months, reports suggest a warming of ties between Amazon and OpenAI, particularly as the latter embarked on a spending spree.

CNBC reported in December that the duo were locked in investment discussions, with OpenAI apparently keen on an agreement which would allow access to Amazon’s in-house AI chips.

What the OpenAI investment suggests

OpenAI has made no secret about its fundraising efforts over the last two years. In November 2024, the firm raised $6.6 billion in funding at a $157 billion valuation, but it hasn’t stopped there.

2025 was a whirlwind year, with the AI developer signing a host of megadeals with industry titans such as Oracle, AMD, Nvidia, and Broadcom.

For OpenAI, the aims are crystal clear: it has an insatiable appetite for compute power and it’s burning cash at an alarming rate.

The company has lined up more than $1 trillion in spending over the next decade, prompting repeated concerns about its long-term viability and whether it can meet the terms of deals signed with Oracle, for example.

With this in mind, backing from Amazon – and crucially, investment – would mark a major seal of approval for the company. From Amazon’s perspective, the situation appears rather convoluted, according to Forrester principal analyst Rowan Curran.

For Amazon to justify this investment, the deal will likely have to center around heavy use of AWS infrastructure for training and inferencing purposes, as well as use of Amazon’s in-house chips.

“Amazon’s reported coming investment in OpenAI would be a tremendous expenditure of capital that will only benefit Amazon if that money goes right into OpenAI using AWS servers for training and inferencing,” he said.

From an AI model perspective, the deal doesn’t seem to add up for the hyperscaler, which already hosts OpenAI models through its Bedrock service.

Enterprises are increasingly using a mixture of options rather than sticking with a monolithic approach to the technology – a trend that AWS sought to capitalize on with the launch of Bedrock in 2023.

“The foundation model market is not commoditized, but investments of this scale into a single company do not reflect the realities of an increasingly diverse model market, and the demands of mature customers who are using an array of models to achieve their goals, rather than a single model,” Curran commented.

Similarly, the company has invested heavily in its own in-house Nova AI model range.

Amazon unveiled the launch of the Nova models at the 2025 AWS re:Invent conference in Las Vegas. As ITPro reported in December, these models have since received an array of updates and improvements.

Notably, however, Curran suggested this could signal a “lack of confidence” in the Nova models and perhaps a growing sense of frustration at progress on this front.

“This external investment would further signal a lack of confidence in AWS's internal family of Nova models to achieve a level of functionality and usage with customers that will produce significant ROI,” he noted.

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January is supposed to be a month full of new starts and potential, in which we try to embrace resolutions or set out our plans for the year ahead.

But in the tech sector, it’s become something of an ominous month – the start of layoff season. January 2026 has been no different, with Amazon announcing 16,000 jobs cut in a plan that could see up to 30,000 cut by the end of May according to Reuters.

Earlier in the month, Dell made waves at CES 2026 with the news that it’s reviving the XPS laptop line, just one year on from its announcement that the brand would be deprecated. What can we make of the job cuts and of Dell's reversal?

In this episode, Rory welcomes back Ross Kelly, ITPro's news and analysis editor, to explore some of January's biggest stories.

Highlights

"What we do know is that this could reach 30,000 and reporting from the BBC suggests that insiders have had a bit of an inkling that there have been job cuts on the horizon over the last couple of weeks. It's also worth noting that in October, Amazon cut more staff – again, this was part of a big efficiency drive."

"I think there is a risk this might open the floodgates potentially for another really bad year in tech layoffs. You know we're in January, the first month, and Amazon's cut 16,000 staff. And the number could reach as high as 30,000. There might be a few other organizations keeping their finger on the pulse and seeing, you know, how is this going to unfold for for AWS and and co and can we follow suit?"

"When you look at consumer sentiment on this, the XPS is an iconic brand. It's a name that everybody across the enterprise and consumer markets has known for the best part of two decades."

"So from the beginning of this AI PC craze, I think the big talking point from our perspective has been the enterprise space and there are tangible benefits here, there's a lot of benefits for organizations. These are devices that IT teams, security leaders, IT leaders are going to be very interested in, whereas, when you're talking about shiny new AI features that run in the background for consumers I think the messaging has been botched there."

Footnotes

• Amazon is cutting 14,000 roles in a bid to ‘operate like the world's largest startup’
• ‘Lean into it’: Amazon CEO Andy Jassy thinks enterprises need to embrace AI to avoid being left behind – even if that means fewer jobs in the future
• Fresh Microsoft layoffs hit software engineering roles, documents show
• Return of the XPS: Dell resurrects iconic brand at CES after customer demand
• Dell kills off XPS and other brands for PC simplicity

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Russian-backed hacker groups are exploiting misconfigured edge devices – now preferring that tactic over hunting down traditional vulnerabilities to gain access to company networks.

That's according to an end-of-year report by Amazon Threat Intelligence, which included details of a nearly five-year-long campaign by Russian state-sponsored hackers that AWS said marked a pivot in tactics.

Now, the primary initial access vector has become misconfigured customer network edge devices, according to AWS Security CISO CJ Moses, with a decline in traditional vulnerability exploitation.

"This tactical adaptation enables the same operational outcomes, credential harvesting, and lateral movement into victim organizations’ online services and infrastructure, while reducing the actor’s exposure and resource expenditure," Moses noted in a post on the AWS security blog.

Amazon isn't the first to spot a shift to edge devices. Sophos noted in April that edge devices like firewalls and routers were the main initial attack vector for 30% of incidents last year, while governmental security agencies issued guidance about vulnerabilities in edge devices back in February.

Last year, Fortinet's FortiGate edge devices were exploited by China-backed hackers, and the FBI warned that Ubiquity EdgeRouters were targeted via a wide-ranging hacking campaign.

How the edge campaign unfolded

According to Amazon, hackers targeted enterprise routers, VPN concentrators and remote access gateways, network management appliances, and cloud-based project management systems, as well as collaboration and wiki platforms.

Moses said the evidence suggested that the hackers were using packet capture and traffic analysis to target network edge devices. This involves attackers compromising an edge device hosted on AWS, capturing packets to harvest credentials, and then using those to penetrate an organization's services or infrastructure, gaining access to wider systems.

AWS telemetry suggested the attackers maintained persistent connections, allowing for data to be stolen.

"Targeting the 'low-hanging fruit' of likely misconfigured customer devices with exposed management interfaces achieves the same strategic objectives [as vulnerability exploitation], which is persistent access to critical infrastructure networks and credential harvesting for accessing victim organizations’ online services," Moses added.

Notably, the company revealed those attacks included customer network edge devices hosted on AWS.

"This was not due to a weakness in AWS; these appear to be customer misconfigured devices. Network connection analysis shows actor-controlled IP addresses establishing persistent connections to compromised EC2 instances operating customers’ network appliance software," Moses noted.

That said, AWS did take action. For example, the cloud giant notified affected customers that they were compromised, fixed compromised EC2 instances, and alerted network alliance vendors.

"Through coordinated efforts, since our discovery of this activity, we have disrupted active threat actor operations and reduced the attack surface available to this threat activity subcluster," Moses added.

To protect edge devices against this style of attacks, organizations must secure and monitor their edge devices, Moses advised, keeping watch for unexpected packet capture files or utilities and enforcing strong authentication – in particular those working in the energy sector or critical national infrastructure.

A 'clear evolution in tactics'

This particular string of attacks dates back to 2021 and appears to be associated with Russia's Main Intelligence Directorate, Moses said.

Similarly, the campaign focused primarily on critical national infrastructure in the West, targeting the energy sector and its supply chain in particular.

Moses traced a timeline back to 2021's WatchGuard exploitation, saying that's when Amazon first spotted the hackers targeting misconfigured devices.

That continued in the next few years with misconfigured devices targeted alongside exploits such as the Confluence and Veeam flaws, but by 2025 the hackers' success with edge devices led to that taking centre stage with zero-day exploitation activity declining.

"The campaign demonstrates a clear evolution in tactics," Moses said.

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Amazon has had hundreds of fraudulent job applications from North Korean threat actors since April last year, with the company uncovering one successful campaign internally.

According to chief security officer (CSO) Stephen Schmidt, the company has prevented more than 1,800 suspected DPRK operatives from joining since April 2024, and has detected 27% more DPRK-affiliated applications quarter over quarter this year.

“Over the past few years, North Korean (DPRK) nationals have been attempting to secure remote IT jobs with companies worldwide, particularly in the U.S,” Schmidt wrote in a post on LinkedIn.

“Their objective is typically straightforward: get hired, get paid, and funnel wages back to fund the regime's weapons programs.”

With this number of fraudulent applications, Schmidt said the company has a good insight into how these threats are evolving, and there are several notable areas of interest for enterprise security teams.

North Korean hackers are refining tactics

First and foremost, identity theft has become more calculated, Schmidt said, with operatives targeting individual software engineers who provide real credibility, rather than people with minimal online presence.

Operatives involved in these campaigns often work with facilitators managing “laptop farms”, Schmidt added. US locations that receive shipments and maintain domestic presence, while the worker operates remotely from outside the country.

LinkedIn strategies are also getting more sophisticated, with the fraudsters hijacking dormant accounts through compromised credentials to gain verification.

"We've also identified networks where people hand over access to their accounts in exchange for payment," he said.

Research shows LinkedIn has become a prime hunting ground for cyber criminals, with analysis by Clear Sky Security in late 2024 showing hackers are using the professional networking app to both target victims and build an online presence.

A more recent study from Bitdefender Labs also highlighted the growing threats enterprises face through the platform, uncovering an Iranian-linked campaign which took inspiration from previous North Korean efforts.

Notably, Schmidt warned threat actors are increasingly targeting AI and machine learning roles, both of which are growing in demand as companies ramp up adoption of the technology.

One hacker slipped through the cracks

The company admitted that one imposter did manage to slip through the cracks in a recent campaign, however.

According to reports from Bloomberg, the company discovered a fake systems development contractor by tracking keystroke inputs.

Security teams at the retail giant observed significant keystroke lag which raised the alarm. Typically, a US-based remote worker would record keystroke data within several milliseconds.

In this instance, however, the worker’s keystroke lag stood at “more than 110 milliseconds”, suggesting they were based outside the country.

Amazon isn't alone in falling prey to hackers involved in these campaigns. Last year, cybersecurity firm KnowBe4 inadvertently hired a North Korean hacker in an incident which prompted an overhaul of hiring processes at the company.

The individual managed to pass background checks, but were discovered after they began loading malware shortly after receiving their Mac workstation.

North Korean threats will continue

Repeated warnings have been issued over the threats posed by North Korean threat actors over the last 18 months. Attack methods have shifted rapidly, with operators choosing to infiltrate enterprises to wreak havoc with malware and to extract valuable intellectual property.

Earlier this year, the FBI issued guidance on how to avoid the scam, urging organisations to practice the principle of least privilege and ramp up monitoring and investigation of network traffic.

More recently, Google warned that fake North Korean workers were now popping up in increasing numbers in Europe, using online recruitment platforms including Upwork, Telegram, and Freelancer. They've also been carrying out more extortion attempts and targeting larger organizations.

"If you’re concerned about these threats in your organization, query your databases for common indicators: patterns in resumes, emails, phone numbers, educational backgrounds," advised Schmidt.

"Implement identity verification at multiple hiring stages and monitor for anomalous technical behavior: unusual remote access, unauthorized hardware. If you identify suspected DPRK IT workers, report it to the FBI or your local law enforcement."

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Amazon Web Services (AWS) is building a new transatlantic subsea cable system linking the US and Ireland known as Fastnet.

Fastnet is set for deployment in 2028 and will link Maryland and County Cork with a line offering more than 320 terabits per second. The cloud computing giant said equates to the entire digitized Library of Congress every three seconds, or 12.5 million HD films at the same time.

The aim of the Fastnet link is to boost capacity but also network resilience, with AWS insisting it will reduce service disruptions for its customers by offering an additional access point in case other cables have issues – a promise that comes weeks after a massive AWS outage caused by a DNS fault.

The cables are part of AWS' growing private network, which began in earnest back in 2016 and now makes up over nine million kilometers of cabling over land and under sea.

AWS noted that unlike the public internet, which requires networking devices to make a routing decision with limited network visibility, its own system uses real-time traffic monitoring for "complete visibility into every link within the global network”.

This, the tech giant said, will help optimize performance and avoid traffic congestion.

AWS eyes scalable networking

AWS said Fastnet makes use of advanced optical switching branching unit technology, a piece of kit that splits traffic via different routes, letting AWS choose the best path by remotely reconfiguring the system.

"This state-of-the-art unit is strategically positioned on the cable route, enabling seamless redirection of data to future landing points as network demands evolve," AWS said.

"This scalable architecture is specifically designed to handle growing AI traffic loads, allowing customers to rapidly expand their data demands while the system adapts to accommodate future growth."

Beyond that, AWS said it has armored the cable with extra layers of steel wires in areas closer to shore to protect against "natural and human activity". That comes a year after two Baltic subsea cables were severed in what appeared to be sabotage.

Notably, the landing point locations in Ireland and Maryland were carefully chosen to offer a route away from traditional cable corridors.

That offers a backup route if other cables have issues, but also lets AWS create a network designed to support growing demands from cloud computing, AI, and edge applications.

Taoiseach Micheál Martin welcomed the announcement, adding that the investment will help “reinforce the resilience of critical digital infrastructure” across the Republic of Ireland.

"By linking County Cork to Maryland in the United States, Ireland will become a true gateway to Europe for submarine telecommunications cables," Martin said.

Wes Moore, Governor of Maryland, added: "Building Maryland’s first-ever subsea fiber cable is an achievement bigger than broadband connectivity — it’s about securing Maryland’s status as a global hub for innovation, job creation, and high-tech investment."

"To grow our economy, we need to prioritize industries of the future," Moore added. "That is exactly what this project helps us deliver, in partnership with leaders with deep local ties and robust commitment to community engagement."

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Amazon has confirmed massive job cuts after reports suggested the company was planning to slash as many as 30,000 corporate roles.

Media reports had suggested the cuts would arrive today and impact as many as one-in-ten corporate employees.

However, Amazon has now confirmed the layoffs, revealing the move will see around 14,000 employees cut. Notably, that includes hiring to fill necessary posts, suggesting the total number of redundancies could be higher.

In a blog post relaying a message sent to employees, Beth Galetti, SVP of People Experience and Technology at Amazon, said the job cuts were part of efforts to "operate like the world's largest startup" by reducing bureaucracy.

"The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs," she said.

Galetti also pointed to the rise of AI as one motivation for the cuts.

"This generation of AI is the most transformative technology we’ve seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones)," she added.

"We’re convicted that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business."

In July, Amazon posted operating income of $19.2 billion on revenue of $167.7 billion in its last quarter, and is set to release its next earnings statement on Thursday.

"Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we're delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly."

Amazon has implemented massive cuts before. Across 2022 and 2023 it slashed more than 27,000 jobs during what was a challenging period for workers across the tech sector, with several hundred thousand employees cut across a range of major industry players.

Amazon layoff rumors have been simmering away

The confirmation of the layoffs follows intense speculation about the scale of the cuts at Amazon. Reuters had reported that 30,000 jobs were at risk, for example, with sources telling the publication the company aimed to reduce expenses and headcount as a result of pandemic-era overhiring.

These cuts were expected to impact divisions including HR; operations devices and services; and AWS, the report noted. Email notifications of job cuts will begin today, Reuters added, with managers given extra training for redundancies yesterday.

That was confirmed by separate reports by CNBC and the Wall Street Journal, the latter of which noted the cuts would start this week and continue for some time.

According to the WSJ, the layoffs will also impact staff in advertising and other business units. These reports follow initial rumors of a round of job cuts that started two weeks ago.

Amazon has more than 1.5 million employees, of which 350,000 are deemed corporate, suggesting such cuts would total nearly one-in-ten workers.

AI or overhiring – or both?

Beyond Galetti's explanation to staff, what's behind the cuts? Reuters noted that Amazon CEO Andy Jassy has previously announced plans to cut internal bureaucracy, with a target of increasing worker-to-manager rations by 15% this year.

The company even set up an anonymous email address for staff to complain about inefficiencies that's received 1,500 responses.

“I would say bureaucracy is really anathema to startups and to entrepreneurial organizations,” Jassy said at an event in September, according to CNBC.

"As you get larger, it’s really easy to accumulate bureaucracy, a lot of bureaucracy that you may not see."

Two Reuters sources noted that Amazon had hoped more people would quit following Amazon's strict return to office mandate, and now faces laying off a higher number of staff.

Any staff failing to meet that mandate have been told they've "voluntarily quit" and will not receive severance, the Reuters sources said.

However, over the summer Jassy also warned that the Amazon workforce should brace for impact from AI, telling staff to be "curious" and become "conversant" in the technology.

"We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs," Jassy wrote in a memo to employees.

"It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company."

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Amazon Web Services (AWS) still leads the pack in the rapidly-growing Infrastructure as a Service (IaaS) cloud market – but its lead is narrowing.

According to research from Gartner, AWS maintained its lead in the IaaS space across 2024 with a 37.7% market share and revenues of $64.8 billion.

However, analysis from the consultancy showed a poorer performance compared to the year prior, when it held 39% of the market.

While this represents a marginal decline, gains at key competitors highlight growing pressure on the hyperscaler. Microsoft, for example, saw its market share rise from 23% to 23.9% while Google's increased from 8.2% to 9%.

Elsewhere, market share at Alibaba and Huawei also dipped across the year, Gartner found.

“Cloud providers are investing heavily in AI infrastructure and capabilities to become leaders in the rapidly evolving AI-optimized IaaS market," said Hardeep Singh, principal analyst at Gartner.

"They expect that AI will become a much larger revenue contributor in the future, even though it currently remains a relatively small slice of their overall revenue within the IaaS space."

Overall, the worldwide infrastructure as a service (IaaS) market grew 22.5% in 2024, reaching $171.8 billion.

This growth, Gartner noted, is driven by a demand for flexibility with data residency and sovereignty, as enterprises seek to gradually transition to the cloud while keeping control over their data and operations.

"As enterprises continue to seek greater flexibility, improved resilience and optimized performance, there is sustained demand for cloud migration and modernization services," Singh added.

"Enterprises want to transform their IT infrastructure by leveraging multiple platforms for AI and prioritizing modernization by migrating existing workloads to the cloud. They are also deploying cloud native applications across diverse environments.”

Meanwhile, emerging AI-optimized IaaS offerings from non-hyperscalers or GPU as a service (GPUaaS) providers are also playing a key role in addressing immediate capacity requirements by offering flexible, high-performance compute on demand.

Amazon’s cloud dominance faces big challenges

Gartner’s research isn’t the first to point to a declining state of affairs for AWS in recent months. A report from Canalys earlier this year showed sluggish growth rates for the hyperscaler, recording just 17% in the first quarter of 2025.

This not only marked a decrease compared to the 19% recorded in Q4 2024, but came in sharp contrast to growth rates of more than 30% at Microsoft and Google Cloud.

Growth is being driven by both enterprise end-users and providers, said Canalys, with leading hyperscalers ramping up their efforts to optimize infrastructure to accommodate AI adoption.

Amazon is also facing increased pressure in the UK alongside Microsoft over its market dominance.

After a three-year investigation, the UK's Competition and Markets Authority (CMA) issued a report late last month concluding that the two companies have "significant unilateral market power" in the UK's cloud infrastructure services market.

Combined, the two cloud computing giants command a 70% market share, dominating in both the IaaS and PaaS domains, the CMA found.

The competition watchdog recommended that both companies be assessed for Strategic Market Status (SMS), which could lead to targeted interventions to encourage greater competition.

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The UK Competition and Markets Authority (CMA) has accused Microsoft and Amazon of harming competition in the country’s cloud computing market.

Following a long-running probe into the state of the industry, the regulator warned competition in the space is “not working well”, highlighting an array of business practices it said hampers competition.

The probe pointed specifically to a trend of market concentration in the Infrastructure as a Service (IaaS) space, noting that Amazon and Microsoft command “significant unilateral market power”.

Amazon and Microsoft are the two largest providers in this domain, each of which controlled a share of the market ranging between 30-40%, as of 2024.

The Platform as a Service (PaaS) market also showed signs of concentration, according to the CMA, with Microsoft’s share having increased to 20-30% since 2020.

All told, this market concentration is hampering the ability of competitors to enter the space, the CMA alleges.

“There are substantial barriers to entry and expansion in cloud services, particularly in IaaS as this requires significant capital investment in fixed assets such as data centers, networks and servers, and components which become largely a sunk cost,” the CMA report reads.

“There are also economies of scale, meaning that larger cloud providers have lower average costs compared to smaller providers,” it added.

“The largest cloud providers are making substantial investments in IaaS and AI capabilities to expand their services in coming years, and while this investment can have pro-competitive effects and benefit cloud customers, it may also deter market entry or expansion by potential rivals.”

The enterprise impact of cloud practices

A key focus of the CMA probe has been egress fees. The regulator noted that the number of customers switching suppliers each year was low – only around 1% – it suggested this could be more to do with barriers to doing so rather than businesses’ preferences.

“Customers face both commercial and technical barriers when seeking to multi-cloud or switch their cloud provider and many currently think that the costs outweigh the benefits,” the report noted.

“Barriers to multi-cloud negatively affect many customers’ ability to use and integrate multiple public clouds, and this limits customers’ ability and incentive to exercise choice over their cloud provider."

This applies equally to small businesses and larger enterprises, the CMA said, with the former lacking the financial resources and the latter facing high fees due to the large quantities of data they have stored in the cloud.

In addition to cloud-related concerns, the CMA also took issue with Microsoft’s licensing practices. It argued that the tech giant incentivizes customers to use Windows Server through its Azure cloud service rather than competing options.

This, the regulator noted, “further restricts” the limited choices faced by enterprises.

Recommendations outlined by the CMA report include a further investigation into AWS and Microsoft under the Digital Markets, Competition and Consumers (DMCC) Act.

“We recommend that the CMA Board use its digital markets powers to prioritize commencing SMS investigations to consider designation the two largest providers, Microsoft and AWS, with strategic market status in relation to their respective digital activities in cloud services,” the report states.

Microsoft and AWS hit back at CMA ruling

Microsoft and AWS have hit back at the regulator in the wake of the ruling. A Microsoft spokesperson said the report “misses the mark again”, and claimed the industry has “never been so dynamic and competitive”.

“Its recommendations (also) fail to cover Google, one of the fastest-growing cloud market participants,” the spokesperson said.

“Microsoft looks forward to working with the Digital Markets Unit toward an outcome that more accurately reflects the current competition in cloud that benefits UK customers.”

A spokesperson for AWS issued an equally scathing response to the report, saying it “disregards clear evidence of robust competition” in the UK IT services industry.

“The action proposed by the Inquiry Group is unwarranted and undermines the substantial investment and innovation that have already benefitted hundreds of thousands of UK businesses,” the spokesperson said.

“It risks making the UK a global outlier at a time when businesses need regulatory predictability for the UK to maintain international competitiveness. We will continue to engage constructively with the CMA as they consider their next steps.”

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EU-based cloud providers have seen their local revenues triple in recent years, new research shows, but there’s still a long way to go until they can break the dominance of US tech giants.

Analysis from Synergy Research Group shows US providers - including Amazon, Microsoft, and Google Cloud - command a 70% share of the European market compared to just 15% for regional firms.

Compounding the situation for European firms is the fact the market has grown by a factor of six over the last eight years, meaning the market share for local providers has fallen from 29% in 2017.

There is light on the horizon, however. Synergy noted that this 15% share has held steady since 2022, suggesting no further inroads from US giants.

The figures come amid a period of renewed demands for local cloud infrastructure and concerns over data sovereignty, with regional IT leaders reportedly ‘skittish’ over the influence of US cloud companies.

Despite calls for a more localized approach to cloud computing, the reality is that cloud is a market where size really does matter, according to John Dinsdale, chief analyst at Synergy.

"The cloud market is a game of scale where aspiring leaders have to place huge financial bets, must have a long-term view of investments and profitability, must maintain a focused determination to succeed, and must consistently achieve operational excellence," he said.

"No European companies have come close to that set of criteria and the result is a market where the five leaders are all US companies."

US cloud providers are investing heavily

The big American players have set aside whopping sums for capital expenditure programs with AI sparking new infrastructure demands and capacity.

Earlier this year, Microsoft detailed plans to spend around $80 billion on infrastructure expansion while Google recently announced an additional $10 billion, taking its total to $85 billion for the year.

A significant portion of this investment is flowing into Europe, with Microsoft spending $400 million to expand its Swiss data centers and $2.1 billion for cloud and AI infrastructure in Spain.

AWS, meanwhile, plans to spend £8 billion in the UK over the next five years.

"As US cloud providers continue to invest some €10 billion every quarter in European capex programs, that presents an impossible hill to climb for any companies who wish to seriously challenge their market leadership," Dinsdale added.

Some of that investment has been driven by efforts by American cloud providers to build sufficient local infrastructure to hold European data in Europe - and protect that from external pressure.

Both Google and Microsoft have pledged to protect local data via their sovereign cloud services. Last year, AWS revealed a €7.8 billion investment into AWS European Sovereign Cloud over the next 15 years.

American cloud providers have been hit by regulatory action in Europe, with Microsoft recently settling with Cloud Infrastructure Services Providers in Europe (CISPE) over a long-running licensing disagreement.

European cloud growth

That American dominance has left local providers battling it out for a small handful of customers, Dinsdale noted, creating an incredibly strained and competitive marketplace.

SAP and Deutsche Telekom each hold 2% of the European market, for example, followed by OVHcloud, Telecom Italia, and Orange.

Other regional players and smaller American and Asian cloud providers are also in the mix.

"Consequently European cloud providers have mostly settled into positions of serving local groups of customers that have some specific local needs, sometimes working as partners to the big US cloud providers," Dinsdale added.

"While many European cloud providers will continue to grow, they are unlikely to move the needle much in terms of overall European market share.”

Synergy said European cloud infrastructure service revenues were €36 billion in the first half of 2025, predicting annual spend would grow by a quarter versus last year.

Public IaaS and PaaS services make up the bulk of the market, the report added, with AI driving the market with up to 160% growth in relevant services.

The UK and Germany remain the biggest markets for cloud, but Ireland, Spain, and Italy are seeing the highest growth rates.

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Amazon Web Services (AWS) hosted its latest AWS Summit this week in New York, and the importance of AI for the company was manifest in its announcements.

While the first 20 years of its existence and success has been firmly rooted in the cloud, like all of its rivals and many more companies that wouldn’t be considered direct competitors it has turned its attention to riding the generative AI wave.

With the advent of agentic AI, the latest industry buzzword, the situation for AWS is no different.

So without further ado, these are the three most important announcements to come out of AWS Summit New York 2025.

Amazon Bedrock AgentCore

Two of the key concerns around AI agents and generative AI in business are security and governance. Can organizations be certain that the AI service they’re using isn’t leaking data and that data is stored and accessed in a way that complies with regulations, such as GDPR for example.

AgentCore, the latest addition to AWS’ managed generative AI service Amazon Bedrock, aims to solve these issues as well as maintaining reliability all while ensuring the agents can continue to operate autonomously.

AgentCore is composed of seven different services. These include Gateway, which provides AI agents access to tools like APIs and Lambda functions securely, and Browser Tool, which (as the name would suggest) allows agents to securely access websites through a cloud-based browser.

Meanwhile, Memory lets developers create context-aware agents with long-term and short-term memory.

According to AWS, all this aids developers in moving an AI agent from proof of concept to an application that can scale for millions of users.

AI Agents and Tools in AWS Marketplace

If you don’t have the capacity or desire to build your own agents, but still want to take advantage of agentic AI, this second key announcement is for you.

During his keynote, Swami Sivasubramanian, AWS VP for Agentic AI, said the cloud computing giant is on a mission to improve access to AI agents for enterprises.

“Building specialized agents in-house requires expertise across multiple domains, not just from large language models, but also with specific business functions,” he said.

“No organization can be an expert in everything – nor should they be – and just as today’s software ecosystem thrives on third-party APIs, tomorrow's AI agents will need to integrate specialized capabilities from across organizations, providers and systems.”

Key to driving access here is the new AI Agents and Tools service in AWS Marketplace. The offering will allow customers to “discover, buy, deploy, and manage AI agents and tools from leading providers”, according to AWS.

Anthropic, Brave, Snowflake, IBM and Agentforce were all named during Sivasubramanian’s keynote, among others.

Amazon S3 Vectors

The final of our top three most important announcements is Amazon S3 Vectors, which most obviously marries together AWS’ cloud storage pedigree with its AI pivot.

S3 Vectors is a cloud object storage offering with native vector support for AI workloads. According to AWS, it can reduce the cost of storing and querying vectors by “up to 90% compared to conventional methods.

It also integrates with Amazon Bedrock Knowledge Bases and OpenSearch Service, which, the company claims, streamlines and reduces the costs of RAG and vector search operations.

In his keynote, Sivasubramanian said the service was “ideal for infrequent query workloads like batch processing and non-real time agentic apps”.

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Amazon won't need as many human workers in the future, according to CEO Andy Jassy, but that’ll be a good thing for those that remain.

In a recent interview, Jassy doubled down on the AI plans outlined in a memo to staff last month. At the time, Jassy said the use of the technology will enable the company to unlock “efficiency gains” - a common talking point for companies ramping up AI adoption.

Ultimately, the strategy will lead to "fewer people doing some of the jobs that are being done today”, Jassy said.

Speaking to CNBC, the Amazon chief exec defended the move when asked about the impact of the technology on the workforce, suggesting that it will deliver benefits for both the company and staff.

"This AI technology is going to be the most transformative technology in our lifetime," Jassy said, adding: "it's going to change the way we work."

He claimed AI agents would be able to do coding, research, analytics, security, website localization and "they'll do spreadsheets over time."

"That means it's going to change a lot of these particular job functions,” he added.

Given the scale of the predicted change, Jassy said businesses and employees alike now face a decision - they can either “lean into it and embrace it” or they can “wish it away and have it happen to you”.

Amazon is leaning into AI

Jassy argued that Amazon is better off doing the former, suggesting it would make for better work for the staff who remain employed.

"They won't have to do as much work," he said, "and every single person gets to start every single task at a more advanced starting spot. That's going to make all of our jobs more interesting."

"Like with every technical transformation, there will be fewer people doing some of the jobs that the technology actually starts to automate," Jassy added.

"But there’s going to be other jobs — we're going to hire more people in AI, more people in robotics."

Amazon has reportedly cut more than 20,000 jobs since 2022, including recent cuts to its books and driverless divisions.

While these cuts weren’t linked to AI and largely occurred during the infamous “year of efficiency” in 2023, concerns are growing over the impact of the technology on the job market.

Recent analysis found that entry-level roles are being impacted by the influx of AI tools across a range of industries, for example.

This has prompted calls from leading industry figures to initiate a frank discussion on the matter, with Anthropic CEO Dario Amodei suggesting workers are “burying their heads in the sand” on the topic.

There have already been high-profile examples of AI-related job cuts, most notably at Klarna. The buy now, pay later giant cut staff as part of a sharpened focus on AI adoption, which proved highly beneficial for the company.

Similarly, Salesforce pinned jobs cuts on an AI focused reorganization, Intuit slashed 1,800 jobs to power AI investment, and CrowdStrike cut 500 jobs earlier this year as part of a strategic shift to AI.

Some industry leaders appear unfazed despite growing concerns, however. Google CEO Sundar Pichai offered a relaxed outlook on the topic in a recent interview, for example.

According to Pichai, while the technology may impact jobs, it will ultimately lead to better quality of work - at least for those still employed.

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Amazon CEO Andy Jassy has told his workforce that their jobs could be taken by generative AI in the coming years.

In a memo sent to employees on 17 June, Jassy wrote that Amazon expects "efficiency gains" from AI across the company, which would result in job losses.

"We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs," Jassy wrote in the memo. "It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company."

To protect themselves from AI-job cuts, Jassy urged staff to be "curious" about AI, and to educate themselves and attend workshops and training sessions within the company. Though he ends that paragraph with a call to get more done with "scrappier" teams.

The memo also suggested that those who embraced the change could become "conversant in AI" and help to improve Amazon's overall AI capabilities. Jassy, who first started at Amazon in 1997 as an assistant product manager, likened the learning curve to his own experience of working on internal leaner teams within AWS.

"We didn't have tools resembling anything like generative AI, but we had broad remits, high ambition, and saw the opportunity to improve (and invent) so many customer experiences," Jassy wrote.

There have been more than 27,000 job cuts at Amazon since 2022, with the most recent losses across its devices and services group and the books division. According to the memo, Amazon already has more than 1,000 AI services and apps that the company has either built or is in production, but that, Jassy notes, is just a "small fraction" of what it plans to launch in the near future.

Microsoft has confirmed plans to cut around 3% of employees as part of a fresh cost-cutting scheme.

Initially reported by CNBC, the layoffs are set to affect around 6,000 workers globally and will span a range of divisions, locations, and seniority levels.

Among these are workers at the company’s Redmond headquarters. The state of Washington revealed on Tuesday that 1,985 of the affected employees are linked to its HQ.

Over 1,500 of these are believed to be in-office positions.

In a statement given to ITPro, a spokesperson said Microsoft will “continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace”.

The spokesperson added that a key focus in this round of layoffs is to increase operational agility by reducing layers with fewer managers. Microsoft’s chief financial officer Amy Hood hinted at potential management cuts last month.

"We continue to focus on building high-performing teams and increasing our agility by reducing layers with fewer managers," Hood said at the time.

The tech giant isn’t alone in targeting managerial roles, however. A host of major tech firms have implemented cuts to management positions in a bid to streamline operations.

Both Amazon and Google have cut management positions, for example. In December last year, Google CEO Sundar Pichai revealed the company had laid off 10% of managers, directors, and VPs across the year.

As part of the move, some affected workers were reassigned to non-managerial positions, the company told ITPro at the time.

Latest Microsoft layoffs mark second batch of the year

Microsoft has already implemented workforce cuts this year, with the company revealing plans in January to reduce headcount based on performance metrics.

Again, these cuts align with a recurring trend across the industry, with firms eliminating staff who do not meet expectations.

The layoffs at Microsoft mark the largest since the tech giant cut 10,000 roles in 2023 during a year in which big tech slashed over a quarter of a million roles.

Cuts at the firm also come in the wake of positive financial results. In its latest quarterly earnings report last month, the tech giant recorded $25.8 billion in quarterly net income.

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AWS has expanded support for languages in Amazon Q Developer, making it easier for developers to code in their first language.

Amazon Q Developer is an AI assistant created for the end-to-end software development lifecycle that can help answer questions, create documentation, run software upgrades, and even review code.

Reflecting the global nature of the coding workforce, AWS said that the platform now supports "additional human languages" beyond just English, including Arabic, French, German, Hindi, Italian, Japanese, Korean, Mandarin, Portuguese, Spanish.

The move follows the Amazon Q Business platform being made available in Europe for the first time last month.

"While English remains the lingua franca of programming, the reality of modern software development extends far beyond code," wrote Brian Beach, Principal Solutions Architect at AWS, in a blog post.

"This natural flow of conversation in any language helps maintain the developer’s focus and flow, eliminating the mental overhead of constant translation," Beach added.

The expanded language support is available immediately to users on the free tier, as well as the Pro Tier.

Amazon Q Developer changes deliver “more natural, fluid conversations”

Beach said developers around the world use Amazon Q Developer to discuss architecture decisions, create documentation, and design user interfaces — all for applications that serve audiences that are equally global.

"By expanding language support, Amazon Q Developer now enables developers to have more natural, fluid conversations about complex technical concepts in their preferred language, whether they’re designing system architecture, generating documentation, or planning application localization strategies," he said.

Beach shared an example where he asked how to host a container on AWS in English, Mandarin, Hindi and Spanish, with Amazon Q Developer returning a reply in the same language — and, importantly, getting the answer right.

"Not only does Amazon Q Developer now provide complete responses in these languages, but it also maintains technical accuracy while adapting to linguistic nuances," Beach noted.

Beyond answering questions, Amazon Q Developer can also suggest follow-up questions in the user's default language.

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Amazon has banned the use of AI tools during the interview process, and it’s not the only major firm cracking down on the trend.

According to internal documents seen by Business Insider, the tech giant hit out at the use of teleprompter-style AI tools which can give applicants assistance in real-time during interviews.

Using chatbots represent a leg up that Amazon termed an “unfair advantage” as well as an impediment to the assessment of “authentic” skill.

"To ensure a fair and transparent recruitment process, please do not use GenAl tools during your interview unless explicitly permitted," the guidelines read.

"Failure to adhere to these guidelines may result in disqualification from the recruitment process," it added.

Amazon also shared guidelines for interviewers on how to spot those using AI tools. Some of the telltale signs include candidates typing when being asked questions, candidates appearing to read rather than respond naturally, or candidates eyes wandering.

Alarm bells were raised internally over this issue when a recent video from an AI company suggested the use of its coding assistant during an interview helped secure a job offer from Amazon. This is according to a person familiar with the matter who spoke to Business Insider.

These sorts of AI tools focused on interview assistance have been cropping up increasingly frequently, with The Times having reported on one such tool from a company called ‘Final Round.’

“It works like a magical teleprompter that can prompt them the right thing to say at the right time,” claims Michael Guan, CEO of Final Round.

You’re only cheating yourself using AI tools

Using these tools will not only make your responses look scripted and robotic, TMT analyst Ian Silvera thinks, but will also put you in a position where you have to rely on these tools even more, thus limiting your own skillset.

“If you want to look like a flesh-bound chatbot, then by all means use an AI teleprompter. But consider this question: would you want to hire someone who has used a prompter? And even if you get through the interview, will you have to keep relying on this technology?" Silvera told ITPro.

Cheney Hamilton of Bloor Research holds a similar opinion, telling ITPro that using these tools does nothing to improve your long-term knowledge as a job applicant or member of staff.

“Using an AI teleprompter to help with job interviews is a bit like trying to cheat in an exam in that you might get through the test, but you’re not actually proving you understand the material,” Hamilton said.

“If someone needs AI to feed what really should be natural responses, how will they handle the role should they get it?” Hamilton added.

Interviews are about more than just ticking the right boxes, Hamilton noted, such as showing interviewers who you are, what your values are, and how you will fit into the company, along with any experiences and ideas you have.

Amazon isn’t the only firm contending with AI applicants

The use of AI tools throughout the recruitment process has been growing in recent years, with both applicants and hiring teams leveraging tools to their advantage.

But it’s become a particular problem for enterprises recruiting staff. AI startup Anthropic recently banned job applicants from using AI at any stage of the application process, explaining that they wanted to understand prospective employees’ interest in Anthropic without mediation through an AI system.

“While we encourage people to use AI systems during their role to help them work faster and more effectively, please do not use AI assistants during the application process,” Anthropic said.

Research from Capterra in October noted a trend of AI’s presence in job applications, finding that nearly half (41%) of job applicants in the UK had used AI to lie about skills in applications.

Experts criticized this trend for many of the same reasons at the time, saying employers were likely to view AI-generated content as dishonest.

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Hackers who were able to steal data belonging to two AWS customers used the platform’s encryption capabilities to conduct a novel type of ransomware attack, researchers have warned.

A new report from cyber resilience firm Halcyon’s RISE team identified a new ransomware campaign targeting Amazon S3 buckets, where the attackers leverage AWS’ server-side encryption along with the Customer Provided Keys (SSE-C) to encrypt victim data.

The group, referred to as ‘Codefinger’ in the report, is reported to have attacked at least two victims, but the technique represents a worrying development as it requires no exploitation of vulnerabilities in the AWS platform.

Instead, if the threat actor is able to steal a customer’s account credentials they are able to use AWS’ secure encryption infrastructure to lockdown the victim’s data, with no known method of recovery without meeting their demands.

The attacker generates and stores AES-256 encryption keys locally, and Halcyon noted that because AWS does not store the encryption key it cannot help recover the data when victims report an attack.

AWS only logs a hash-based message authentication code (HMAC) of the key in its governance service, which the report states is insufficient for recovering any encrypted data, or for forensic analysis of the attack either.

Once they have encrypted the victim’s assets, the files are marked for deletion within seven days in order to coerce the victims into paying, warning them not to try to alter their account permissions and interfere with their access.

Hardening Amazon S3 to avoid compromise

The report noted that although Amazon’s server-side encryption feature has been around for some time, this looks like the first time ransomware operators have used it for malicious purposes, stating that it identified two victims who were impacted by the attack “in recent weeks”.

Halcyon said AWS users can mitigate the threat and harden their AWS environments by restricting SSE-C usage, monitoring and auditing their keys, and implementing advanced logging.

Customers should regularly review permissions for their AWS keys, Halcyon advised adding they should also disable unused keys and rotate active keys frequently.

ITPro approached AWS for a statement on the technique and a spokesperson for the firm said it protects customers to the best of its ability when their keys are exposed, pointing to its shared responsibility model for cloud assets.

“AWS helps customers secure their cloud resources through a shared responsibility model. Anytime AWS is aware of exposed keys, we notify the affected customers,” the spokesperson said.

“We also thoroughly investigate all reports of exposed keys and quickly take any necessary actions, such as applying quarantine policies to minimize risks for customers without disrupting their IT environment.”

The spokesperson added that all customers are strongly advised to act quickly if they believe their credentials may have been compromised.

“We encourage all customers to follow security, identity, and compliance best practices. In the event a customer suspects they may have exposed their credentials, they can start by following the steps listed in this post. As always, customers can contact AWS Support with any questions or concerns about the security of their account.”

AWS has announced its latest round of infrastructure investment focused in the US, pledging $11 billion for data centers in the state of Georgia.

The news follows a similar announcement of $10bn in funding for data centers in Ohio at the end of last year, and comes days after Microsoft said it will spend half of an $80bn tranche of data center funding for 2025 in the US alone.

"AWS's ongoing infrastructure investments across the United States demonstrate our relentless commitment to powering our customers' digital innovation through cloud and AI technologies," said Roger Wehner, vice president of economic development at AWS.

The growth in data centers has been spurred by the rise in generative AI, but AWS said this infrastructure will be designed to be flexible, working both for traditional loads as well as meeting the demands of massive AI models.

"AWS data centers are flexible enough to efficiently run GPUs (graphics processing units) for traditional workloads or AI and machine learning models," the company said in a blog post.

This isn't the first time AWS has invested in Georgian data centers. Indeed, the company noted it has invested $18.5 billion since 2010.

"State and local leaders have cultivated an environment that enables companies like AWS to make bold, forward-looking investments," said Wehner.

"We are excited to deepen our partnership with the state of Georgia and contribute to the continued advancement of its thriving technology landscape."

AWS predicted the initiative would create at least 550 new high-skilled jobs in the region, alongside thousands of non-technical roles such as construction.

The investment is expected to focus on the Butts and Douglas counties. Russ Crumbley, chairman of the Butts County Board of Commissioners, said the investment would be the "most significant in Butts County history."

Sustainable power

AWS didn't detail how the new infrastructure would be powered — a growing problem for AI data centers that has sparked concerns about a lack of energy driving tech companies to nuclear options.

Amazon's own plans to build a data center next to a nuclear plant has seen significant pushback. However, the hyperscaler did note that it had previously made "significant investments" in renewable energy in the state, including eight solar farms.

"Once fully operational, these projects will generate enough carbon-free energy to power an estimated 123,000 US homes each year," the blog post noted.

The boom in AI has driven demand for more data centers, with reports suggesting Europe and the UK risk falling behind without such investment.

Nearly half of Amazon workers say they are already looking for alternative roles due to the firm’s RTO mandate, while two-thirds expect to depart the company within the next year.

That's according to an online survey from the Strategic Organizing Centre (SOC), which asked more than 1,000 Amazon corporate workers about the company's controversial return to Office (RTO) mandate.

After years of hybrid working, Amazon employees are required to start working from the office in January. CEO Andy Jassy confirmed the decision in September this year, telling employees the RTO mandate will help the company “invent, collaborate, and be connected enough to each other” moving forward.

The backlash from staff started immediately, with workers voicing repeated concerns over the move.

According to SOC’s survey, most staff (87%) said they expect their productivity to slide as a result of returning to office work. Respondents also highlighted concerns over longer commutes, higher stress levels, strained relationships with loved ones, and poorer mental health outcomes.

Some staff described the move as a "bait and switch", saying they were hired on the grounds they could work at least partially from home.

Amazon’s RTO mandate continues to irk staff

Employees say the RTO makes no sense, as they no longer necessarily go into the same office as their colleagues or managers. Of those surveyed, 38% said they work in the same office as 20% or less of their team members, with 45% saying their manager works from a different office.

Because of that, 81% of those who responded to the survey said the way they interact with colleagues wasn't likely to change — or would become worse.

The report quotes one staff member with more than seven years of experience at the company saying their commute would be three hours a day, but it would be wasted as they work with a global team.

"They expect me to take early morning meetings and late-night meetings but still want me to go into an office to take virtual meetings,” the respondent said.

"Despite Andy Jassy’s claims about fostering collaboration and team connectivity, corporate teams at Amazon are often geographically dispersed," the report notes. "When the five-day return-to-office policy is fully implemented, many workers will still work with their teams primarily remotely, but they will be required to do so from an office."

RTO Churn

The survey from SOC found that 48% of staff are actively seeking new jobs outside the company, with two-thirds of employees saying they are likely or very likely to leave the company in the next year.

But replacing so many staff could prove difficult. Three-quarters said they wouldn't recommend working at Amazon to a friend.

"The five-day in-office mandate is out of step with major tech competitors, with whom Amazon competes to hire and retain highly-skilled workers," the report adds.

"If Amazon executes the five-day in-office policy in January as planned, it will likely have difficulty retaining and recruiting talent and may harm the very spirit of innovation and collaboration that its leaders claim to value."

Research led by the University of Pittsburgh suggests RTO mandates do indeed spark a 'brain drain'.

The study noted that companies implementing a return to the office typically find it harder to recruit in the wake of the move. Similarly, these firms often lose their best talent as a result.

Senior employees and female staff are among the first to jump ship in the wake of an RTO mandate, the study found.

Amazon's controversial crackdown on remote working appears to have hit a snag - there isn't enough room in the office.

Staff were originally told to come in five days a week from January. However, according to reports from Bloomberg, the company has now told staff at sites in at least seven cities to carry on working at home for up to four months longer.

Staff in Dallas were told not to come in for five days a week until March or April, and those in Manhattan that the date was likely to be May. Meanwhile, according to Business Insider, those in Atlanta, Nashville and Houston have also been told that there will be delays.

In September, CEO Andy Jassy wrote to staff, saying "we've decided that we're going to return to being in the office the way we were before the onset of COVID."

That meant going back to the office full-time, up from the current three days a week, and with no hot-desking.

"For the vast majority of employees, assigned workspaces will be available by January 2, 2025," the company said at the time.

"If your assigned workspace isn't ready by January 2, we still expect everyone to begin fully working from the office by that date."

The announcement was widely opposed by workers. A recent survey by professional social network Blind found that 91% of 2,585 verified Amazon professionals were unhappy with the order.

Some told Blind they'd quit rather than comply, with three-quarters saying they'd be looking for another job. Others said they'd or just wait to be fired.

"My morale for this job is gone, gonna totally check out till PIP," said one.

However, others have suggested that this was playing into Amazon's hands, with the change in policy a cynical move to reduce headcount without having to make expensive layoffs.

Amazon has said that the majority of workers will be returning to the office in January as planned.

The move in the tech industry away from hybrid working shows no signs of abating.

Over the last year, Salesforce, Dell, Apple, and Disney have all tightened up their hybrid working policies, while Starling Bank has mandated a minimum of 10 days a month in the office and BT requiring at least three days a week.

Research tends to show, though, that staff allowed to work flexibly are just as productive as those in the office. A recent study found that enterprises risk losing their best talent when introducing return to office mandates.

AWS has unveiled a range of new agentic AI features for its Amazon Bedrock and Amazon Q platforms, giving customers the ability to both build and deploy agents for different workflows.

Unveiled at AWS re:Invent 2024, the first announcement focused on giving customers the tools to build not just their own agents, but entire teams of agents that can be coordinated to complete more complex tasks.

AWS announced it would be expanding its existing agentic offering, Amazon Bedrock Agents, to support this multi-agent collaboration.

Under the new service, customers can create agents to complete specific tasks alongside the option to create a ‘supervisor’ agent to manage the other agents.

This supervisor coordinates the project, routing tasks to other agents or giving certain agents access to information.

“Bedrock takes what was going to be an almost impossible coordination engineering task and makes it simple to do, and that's what we're doing,” Matt Garman, CEO of AWS, said on stage at re:Invent.

AI agents are coming to Amazon Q

AWS also announced new agentic capabilities for developers in an update to its flagship AI product, Amazon Q. Three new agents will allow developers to reduce workloads, the company said.

The first agent automates the generation of unit testing, the process through which developers will assess the functionality of smaller parts of an entire application or piece of software.

This is time-consuming and tedious work, according to AWS’ director of product management, Adnan Ijaz, though it is needed to build reliable software.

“It takes a lot of time for them to go write tests, but it's necessary if you really need to test what the software is supposed to do,” Ijaz told ITPro.

Operational directly from the integrated developer environment (IDE) and available in preview in GitLab, this agent takes the context of an entire project and generates unit tests, helping developers catch issues earlier and improve code reliability.

The second agent supports the creation of code documentation, providing gains for developers and enabling them to get up to speed particularly quickly on new projects, capture details for other team members, or improve old documentation.

“The reality is, your software evolves quickly, particularly in larger teams,” Ijaz said. Lots of changes get made and several contributors may contribute to it, he added, so documentation falls out of date quickly.

This new agent will also maintain documentation and keep it up to date, Ijaz added, so new developers can access up-to-date documentation.

A third and final agent can be deployed for automating code reviews, helping developers get feedback when required and maintaining the quality of code based on engineering best practices.

Agents are all the rage

The announcement from AWS marks the latest in a string of agentic AI launches by major tech companies this year, with a host of industry competitors dipping their toes in what some have described as the next evolutionary step in AI.

Salesforce, for example, made a big agentic push a few months ago at its annual Dreamforce conference, unveiling Agentforce, a platform which enables enterprises to create their own customizable agents.

Google has also touted the benefits of its own Vertex AI agent offering, having first announced it at Google Cloud Next earlier this year.

In October, analysis from investment firm Sequoia Capital found that tech companies poised to capitalize on a potential multi-trillion-dollar global services market that looks to be drastically altered by the advent of agentic AI.

The autonomous nature of AI agents are a key talking point among industry providers, with agents able to carry out tasks on their own and help reduce strain on human workers.

Amazon Web Services (AWS) customers will soon be able to book time slots at physical locations to connect their storage devices and upload data to the cloud.

Data can be uploaded to any AWS endpoint, including Amazon S3, Amazon Elastic File System (Amazon EFS), or others, using a high throughput connection of up to up to 400Gbps.

Each AWS Data Transfer Terminal will house a patch panel, fiber optic cable and a PC for monitoring data transfer jobs, the hyperscaler revealed. Terminals will be charged by the hour, with no per GB charge for the data transfer if the data remains in the same continent.

The first two Data Transfer Terminals are already up and running in Los Angeles and New York, with plans to launch more globally.

So far, the company is only listing charges for US-to-US transfers - $300 per hour - and US-to-EU at $500.

"On your reserved date and time, visit the location and confirm access with the building reception. You’re escorted by building staff to the floor and your reserved room of the Data Transfer Terminal location," said Channy Yun, principal developer advocate for AWS Cloud.

"Don’t be surprised if there are no AWS signs in the building or room. This is for security reasons to keep your work location as secret as possible."

The company said the terminals will significantly cut the time it takes to upload large amounts of data, meaning ingested data can be processed within minutes.

Customers can then analyze large datasets using Amazon Athena, train and run machine learning models with ingested data using SageMaker, or build scalable applications using Amazon EC2.

"After the data is uploaded to AWS, you can use the extensive suite of AWS services to generate value from your data and accelerate innovation," Yun commented.

"You can also bring your AWS Snowball devices to the location for upload and retain the device for continued use and not rely on traditional shipping methods."

Suggested use cases include video production data for processing in the media and entertainment industry, training data for Advanced Driver Assistance Systems (ADAS) in the automotive industry, or migrating legacy data in the financial services industry.

The hyperscaler also noted the service could help support uploads of equipment sensor data in the industrial and agricultural sectors.

"You can upload large datasets from fleets of vehicles operating and collecting data in metro areas for training machine learning models, digital audio and video files from content creators for media processing workloads, and mapping or imagery data from local government organizations for geographic analysis," said Yun.

Amazon has confirmed that a security incident affecting a third-party vendor has exposed employee information.

The incident saw data allegedly belonging to employees at a host of major tech firms leaked, with the data believed to have been stolen during the 2023 MOVEit breach.

An Amazon spokesperson told ITPro its internal systems remain secure, insisting the incident was isolated to one of its third-party property management systems.

“Amazon and AWS systems remain secure, and we have not experienced a security event. We were notified about a security event at one of our property management vendors that impacted several of its customers including Amazon.”

The statement added that the published information was limited to employee contact information, as well as some location data.

“The only Amazon information involved was employee work contact information, for example work email addresses, desk phone numbers, and building locations.”

Amazon did not confirm how many employees were impacted by the breach.

The tech giant isn’t the only major organization impacted in the data dump. HP, Lenovo, and other parties including HSBC and MetLife have allegedly been impacted in the breach.

ITPro has contacted the organizations for confirmation.

Leaked by a cyber criminal using the moniker ‘Nam3L3ss’, the cache is said to include a variety of employee data including names, email addresses, phone numbers, cost center codes, and, in some cases, entire organizational structures of the affected parties.

Nam3L3ss claims to have over 2.8 million records stolen from Amazon in particular, as well as half a million taken from life insurance company MetLife.

The total number of records published in the initial release was nearly five million lines of data, affecting 25 large organizations.

Nam3L3ss claimed that what they have released so far is less than 0.001% of the data they have in their possession, alleging they have 1,000 releases coming with data that has never been seen before.

The threat actor, who claims not to be a hacker, said the information was taken during the May 2023 MOVEit attacks.

Hackers affiliated with the Cl0p threat collective exploited a zero-day vulnerability in Progress’s MOVEit file transfer protocol, used by thousands of large organizations around the world.

The vulnerability, tracked as CVE-2023-34362, was an SQL injection flaw identified in the MOVEit Transfer web application that was leveraged by the threat actors to gain access to MOVEit Tranfer’s database.

Don't want to return to the office? Amazon has a simple answer for employees refusing RTO mandates: quit.

Matt Garman, chief executive of the tech giant’s cloud division, Amazon Web Services (AWS), told staff at a meeting that they should look elsewhere for work if they didn't think they could work in the office anymore.

Amazon is one of a few major companies to order employees back to the office after the rise of hybrid working. The company first required workers to come in for a minimum of three days a week, which sparked a backlash among employees — and reports of firings of staff who didn't comply.

Last month, the tech giant took things one step further, announcing it will require all staff to return to the office full-time, aside from the odd day working from home for sick days, care responsibilities, and needing to focus. At the time, Amazon CEO Andy Jassy said the move was to "invent, collaborate, and be connected enough to each other".

The move immediately sparked a negative reaction from some staff, with reports emerging that some plan to "soft quit".

Amazon’s RTO push continues

Amazon appears to have little sympathy for such workers. Garman told workers at a company meeting last week that anyone unwilling to come in for the full five days a week should seek employment elsewhere — but he stressed he didn't see that as a negative comment.

"If there are people who just don't work well in that environment and don't want to, that's okay, there are other companies around," said Garman. "By the way, I don't mean that in a bad way," he said, adding "we want to be in an environment where we're working together."

Garman said, according to a transcript seen by Reuters, that most AWS staff actually supported the move.

He echoed Jassy's comments that the RTO was required to ensure innovation and communication at the company. "When we want to really, really innovate on interesting products, I have not seen an ability for us to do that when we're not in-person," said Garman.

Quiet firing?

RTO mandates are largely unpopular among workers — Amazon's sparked a walkout, Dell's staff satisfaction fell in response — raising the question of why companies persist with calling workers back to the office full time.

While Amazon has repeatedly said the move is to make it easier for staff to innovate together, one suggestion that keeps cropping up is it's a way to reduce headcount without paying for layoffs.

One survey saw a quarter of executives admit they hoped RTO mandates led to some staff quitting — and they may well get their wish, as just as many staff said they would consider quitting if faced with an RTO mandate at their own office.

Of course, quiet firing comes with a risk to companies: they may find their very best staff are the ones who depart, hurting their innovation in the long run.

Companies give a lot of reasons for employees to come back to the office — innovation, communication, productivity — but as many as a quarter are also quietly hoping that staff quit.

That's according to research from BambooHR, which surveyed companies on the return to office (RTO) trend, finding that 18% of HR professionals and 25% of VP and c-suite executives hoped for some level of voluntary turnover because of a tougher RTO mandate.

Indeed, 37% of managers, directors and executives believe that layoffs that followed RTO policies happened because fewer people quit than expected.

And they're likely to get their wish, at least in part. More than one-quarter (28)% of employees said they would consider quitting if RTO policies were enacted at their workplace.

"By using RTO mandates as a workforce reduction tactic, companies are losing talent and morale among their employees," the report said. "Nearly half (45%) of the employees who have experienced RTO report significant talent loss within their organizations — talent that was highly valued and wished to be retained."

RTO mandates demotivate staff

Beyond losing staff, companies face other challenges if staff are unhappy about RTO mandates. "This level of dissatisfaction could lead to a further drain of talent, affecting not just morale but also the stability and innovation potential of the workforce," the report found.

Lauren Neal, the founder of Valued at Work, said she's seen RTO mandates being used for layoffs.

“I have seen an organization mandate RTO to a different office — changing from central London to over an hour’s commute away," she said. "The office did not have the space to accommodate all employees, and the thinking was that some would quit."

"I personally feel this dishonest approach does the organization no favors — especially when other personnel can see what’s happening. A lack of trust leads to disengagement and even higher rates of attrition due to a toxic workplace culture."

No wonder then that companies such as Microsoft has made it clear a RTO mandate is not on the cards.

The reasons behind the return to the office push

Of course, companies don't say that they're hoping to cut headcount when they issue an RTO mandate — instead they talk about working practices and innovation.

When Amazon ordered staff back to the office five days a week, CEO Andy Jassy said the aim was to "invent, collaborate, and be connected enough to each other".

But staff aren't entirely buying those reasons. After the Amazon announcement, one employee suggested the aim was to encourage employees to quit, an idea called "quiet firing".

Dell Technologies cited similar motivations with regard to workforce synergy when it demanded a return to the office for staff. This incident also prompted a significant backlash among employees.

Of course, quiet firing isn't just about RTO mandates, noted Glenn Hayes, employment law partner at Hill Dickinson.

“This is the more subtle phenomenon of “nudging” employees slowly but surely out of the door, often indirectly and to avoid conflict, such as not giving pay rises, opportunities for advancement, or putting in place unpopular, but not unreasonable, demands designed to encourage resignation," he says.

Companies should be wary of taking this route though, as this could create larger problems further down the line.

"While employers would need to be careful to avoid constructive dismissal claims in this regard, it may allow them to keep those they want while giving gentle encouragement to those they don’t want to eventually leave," he says. "It’s a careful tightrope to walk.”

Legally dubious

Using an RTO mandate to slash headcount has a significant risk of backfiring, according to Fiona Morgan, a senior employment lawyer with Arbor Law.

"They risk negative workforce morale and even industrial disputes, with adverse consequences for productivity and reputation," she told ITPro.

"And they risk employment tribunal claims from categories of employees who are adversely affected – such as indirect sex discrimination claims from working mothers who may struggle to meet the requirement to return to the office, and claims for failure to make reasonable adjustments and/or discrimination arising in consequence of disability from disabled staff — or staff who have caring responsibilities for disabled family members."

Companies may well have a contractual right to require staff to return to the office, but they shouldn't use it for quiet firing, Morgan added Morgan.

"UK employers who wish to slim down their workforce would be advised to follow a transparent, fair and compliant redundancy consultation process instead," she said.

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Microsoft has assured employees it isn’t considering any changes to its flexible work policy, although this is provided productivity doesn’t drop.

The firm’s cloud and AI EVP Scott Guthrie told staff of Microsoft’s position at an internal meeting, according to Business Insider, who cited two staff members present in the meeting. The staff members asked not to be identified.

According to its own information, Microsoft supports a hybrid working environment and the firm is against any sort of ‘one size fits all’ approach to office attendance or working location.

Microsoft confirmed to Business Insider that it had not changed its flexible working policy.

Guthrie added that the firm’s maintained position would depend on productivity, though there is nothing from Microsoft to suggest that it has concerns in this regard. In fact, some senior figures at Microsoft are actively supportive of remote work.

“If you make the time to do it right, your employees will be more engaged, more productive, and more connected, even when they’re miles away,” Microsoft IT director Keith Boyd wrote in a company blog post.

“And they’ll be far less likely to leave for a competitor who has a more sophisticated and flexible model than you do,” Boyd added.

Microsoft forges its own path 

Microsoft is the odd one out at the moment. RTO mandates have been the source of much debate in recent months as firms look to undo the changes brought about by the pandemic.

Amazon and Dell have been the two loudest voices on this front, with both having announced stricter RTO policies against a backdrop of firm staff resistance and industry criticism.

Most recently, Amazon CEO Andy Jassy announced that the firm would enforce RTO for a full five days a week beginning in January 2025. This move came despite a major backlash when Amazon introduced a 3-day-a-week mandate in 2023.

A leaked internal staff survey after this announcement showed continuing disappointment in the tech giant, with the average staff satisfaction rating clocking in at 1.4 out of a possible five.

Staff at Dell responded similarly after the firm told remote workers that they risked missing out on promotions. Many staff said they were willing to take that risk, and a leaked internal survey the following month revealed plummeting staff satisfaction.

Firms are missing the mark 

Many companies are making the mistake of shifting the dial back on flexible work, according to Barbara Matthews, the CPO at HR platform Remote.

It signals a belief that employees need to be physically present and monitored to be productive, Matthews told ITPro, which is a problematic mindset for two reasons.

“First, it lays a sour foundation for the relationship between management and employees, leaving employees feeling mistrusted and encouraging a culture of presenteeism, which in turn can negatively impact productivity,” Matthews said.

“Secondly, removing opportunities for flexible work is also detrimental to the ongoing battle to attract and retain talent, particularly at times of ongoing skills shortage challenges faced by the tech sector,” she added.

Companies making their working practices less flexible will shrink their prospective talent pool, Matthews added, and will become less attractive to potential employees.

Amazon staff are up in arms over a controversial return to office (RTO) mandate imposed by the company earlier this month.

The new working arrangements, unveiled by CEO Andy Jassy in mid-September, will require all staff to return to the office five days per week from January 2025, and will see hotdesking scrapped.

Amazon has employed a hybrid work policy since mid-2023, with staff required to work from office sites a minimum of three days a week.

However, senior leadership at the tech giant said the policy change aims to bolster productivity by returning to pre-COVID working practices, enabling the workforce to “invent, collaborate, and be connected enough to each other”.

“When we look back over the last five years, we continue to believe that the advantages of being together in the office are significant,” Jassy wrote in a letter addressed to employees.

“I’ve previously explained these benefits, but in summary, we’ve observed that it’s easier for our teammates to learn, model, practice, and strengthen our culture; collaborating, brainstorming, and inventing are simpler and more effective; teaching and learning from one another are more seamless; and, teams tend to be better connected to one another.”

Within just weeks of the announcement, staff have signaled their disapproval of the move, according to reports from Fortune.

Hundreds of workers at the tech giant have complained about the decision, suggesting that it will both negatively impact their personal lives and produce little improvements in terms of productivity.

Sentiment on the RTO mandate was revealed in an anonymous survey created by Amazon employees, Fortune reported last week, and has been circulated among staff via Slack channels.

The creators of the anonymous survey noted they plan to share its results with Jassy and other senior executives in a bid to “provide them with clear insight into the impact of this policy on employees”.

“We are seeking honest, constructive feedback on the recent decision to require a 5-day return to the office schedule,” the survey introduction reportedly states.

The survey revealed that the average staff satisfaction rating following the RTO mandate stood at 1.4 out of a possible 5, highlighting the disapproval of affected workers.

Amazon isn’t alone in sparking a worker revolt

The backlash from some Amazon employees marks the latest pushback against controversial RTO policies. Earlier this year, for example, Dell Technologies faced a similar staff revolt after changing its working practices.

This pushback came after the tech giant implemented new rules requiring hybrid workers to track their office attendance to prove they were entering a physical office space 39 days per financial quarter.

Meanwhile, fully remote workers were also warned they would no longer be eligible for promotions or role changes under the move. Nearly half of the firm’s workforce opted to remain fully remote regardless of the policy, however.

The scale of worker unrest in the wake of this dispute was then laid bare in an internal company survey, with leaked documents at the time showing staff satisfaction had plummeted.

The annual ‘Tell Dell’ survey, which is used to track workforce satisfaction, uses an employee ‘net promoter score’ (eNPS) to measure whether a worker would recommend the company as a place to work.

The company-wide eNPS score is calculated by subtracting the percentage of “detractors” from the percentage of “promoters”.

Results of the survey uncovered widespread dissatisfaction, with the latest eNPS score dropping from 62 to 48.

Dell’s RTO mandate wasn’t the only contributing factor to this decrease in satisfaction, however. Sizeable layoffs at the tech giant were also believed to have played a key role in the dip.

More from ITPro

• If I’d spent billions on fancy office spaces, I’d want staff working from them too
• Eric Schmidt’s car crash Stanford interview showed big tech’s true colors on remote work
• Pushing staff back to the office? You may want to reconsider

Redis shocked the open source community when it unveiled a shift to a more restrictive licensing approach earlier this year, but a senior company figure has told ITPro it was the “only way to compete with Amazon and Google” and claw back commercial value.

CEO Rowan Trollope first announced the decision in March, confirming that future Redis releases were to be made available under RSALv2 (Redis Source Available License) and SSPLv1 (Server Side Public License) licenses.

This dual licensing setup equates to a ‘source available’ approach and marked a departure from the company’s Berkeley Software Distribution (BSD) model, which enables developers to use source code even for commercial purposes

The in-memory data store provider justified its decision at the time, claiming that while it had sponsored “the bulk” of development, the majority of commercial sales were being “channeled through the largest cloud service providers”.

Trollope noted that these major players - which includes Amazon and Google - had more or less “commoditized Redis’ investments” and therefore the licensing approach was no longer delivering commercial value.

The company isn’t the first to have altered its licensing scheme, with MongoDB and HashiCorp also having announced changes over the years to the dismay of the open source community.

However, this particular decision sparked controversy among members of the ecosystem, some of whom described the move as a “bait and switch” tactic whereby vendors are “intentionally opaque about their long-term goals”.

In this instance, the sheer scale of the alleged commoditization by big tech players appears to have warranted drastic action at Redis.

In a statement given to ITPro, Redis’ chief marketing officer Keith Messick defended the move, noting it has since enabled the company to unlock significant commercial gains and to better compete with the aforementioned big tech providers.

“Redis, like many other companies, changed our license because it’s the only way to compete with Amazon and Google,” Messick told ITPro.

“Open source software is important, but traditional OSS licensing makes increasingly less sense in a world where Google and Amazon use their superior monopolistic advantages to make money off of it without giving much back,” he added.

“It’s not just startups dealing with this. Meta’s Llama license basically says ‘Hey, this is open source unless you’re Google, Amazon, etc’.”

Reinforcing Redis’ position, Messick revealed that last week a major US company discovered it had been using Redis for years, but had in fact been paying Google instead.

This could point to a severe imbalance within the broader marketplace, with industry heavyweights being given free rein to lap up financial gains off the back of developer toil.

“They can do things like that because they own the gears and levers of the market,” he added. “The license change was us clawing back one little piece of that.”

“Since we changed the license, we’ve had record revenue growth, but there’s a much more relevant question that I never see asked: what’s Amazon or Google’s revenue from reselling Redis or other open source software? That’s the only question that really matters in my opinion, and good luck getting them to answer.”

Redis commercial gains could be scuppered by growing user exodus

While Messick insisted the move has made Redis more competitive, recent research suggests the provider could be facing an exodus of users.

Research from Percona found 70% of respondents with Redis deployments are looking elsewhere, with a number of leading options already on their radars.

Among these are DragonflyDB, KeyDB, and Skytable, according to Percona. However, the study noted that the “most likely usurper” comes in the form of Valkey.

Unveiled by the Linux Foundation earlier this year, the Valkey Project is a Redis fork developed specifically to provide Redis users with access to an open source alternative.

Percona’s study found that three-quarters of surveyed users are either testing, considering, or have already adopted Valkey in the wake of the Redis shift.

Notably, the report found that organizations spanning a range of sizes have made the shift away from Redis in recent months. One “clear trend” emerged, however, especially concerning organizations with a broader data footprint.

“While companies of all sizes have embraced or are investigating a transition to Valkey, organizations with larger data footprints were significantly more likely than their smaller counterparts to have already begun the shift,” Percona said.

Around 83% of large enterprises have adopted – or are actively exploring – Valkey.

“Modestly sized” companies are following suit, with 70% of mid-market players making the shift and 77% of small businesses switching to Valkey, or considering the shift.

Cost, Percona found, has been a major contributing factor to whether or not organizations abandon Redis since the licensing changes, with many seeking cost-free options.

However, Interest in the Valkey project could also be due to what Percona described as its “impressive roster” of supporting organizations. When the Linux Foundation unveiled Valkey this year, a host of major industry players including Amazon Web Services (AWS), Google Cloud, Oracle, and Ericsson endorsed the project.

Percona’s study noted that awareness of Valkey has grown significantly since its launch, with nearly two-thirds (63%) of respondents revealing they have been aware of the project since its debut.

Jonathan Wright, Infrastructure Lead at AlmaLinux, which has made the switch to Valkey, told ITPro the transition has been both smooth and made sense given the restrictive nature of the licensing changes.

"Valkey continues the open source legacy of Redis prior to its license change,” Wright said.

“As both a user of Redis (now Valkey) within critical parts of our infrastructure and as an OS which ships it to others, the active development, OSI-approved license, and performance improvements made it a no-brainer for us."

The UK's competition watchdog is looking into Amazon’s $4 billion investment in AI firm Anthropic, saying it may refer the deal for further investigation.

First unveiled by Amazon Web Services (AWS) in September 2023, the deal consisted of an initial $1.25 billion stake in the firm and was followed by an additional $2.7 billion, confirmed earlier this year.

As part of the deal, Anthropic committed to use Amazon Web Services (AWS) as its “primary cloud provider” for mission critical workloads, including safety research and future foundation model development.

The intention was to incorporate Anthropic's large language models (LLMs) into Amazon's Bedrock generative AI platform. However, the Competition and Markets Authority (CMA) said the investment has raised competition concerns.

A key factor that prompted this preliminary investigation is that the watchdog believes the partnership could have “resulted in the creation of a relevant merger situation” under the Enterprise Act 2002.

In a statement, the regulator said it will examine whether this could result in a “substantial lessening of competition within any market or markets in the United Kingdom for goods for services”.

The announcement is just the latest in a series of investigations aimed at maintaining fair competition in the AI sector, with the CMA having expressed concerns about the dominance of Google, Amazon, Microsoft, Meta, Apple, and Nvidia.

Earlier this year, the CMA announced a preliminary probe into a multi-million-dollar deal between Microsoft and French startup, Mistral AI.

The watchdog confirmed in May it had closed the investigation after acknowledging the deal was acceptable under UK law.

CMA probes into big tech sector deals have been criticized in recent months, with industry stakeholders suggesting the regulator’s approach could negatively impact confidence in the booming AI space.

Matthew Sinclair, senior director of the Computer & Communications Industry Association (CCIA), said he believes the CMA may be taking a heavy-handed approach.

"The latest CMA announcements will only prolong and exacerbate the pressures on innovative challengers in the AI foundation models sector. Months of regulatory uncertainty are a serious imposition for fast-moving businesses," he said.

"The CMA's novel application of merger control rules in these settings may significantly impair innovation and competition in a vital sector for the UK economy."

There are, in fact, worldwide concerns about competition in the AI sector. Just last month, the CMA announced it was working with the European Commission, the US Department of Justice ,and the US Federal Trade Commission to monitor the sector.

All three organizations said they were concerned about concentrated control of key inputs such as specialized chips, substantial compute, data at scale, and specialist technical expertise.

Similarly, concerns were raised about industry players entrenching or extending market power in AI-related markets, and that partnerships, financial investments, and other connections between firms could make these risks worse.

The CMA will make its decision on whether to investigate further in the next 40 working days.

ITPro has approached Amazon for comment.

Microsoft says it plans to continue spending heavily on AI, though admits it will take a long time for a return on that investment — a message mirrored throughout much of the rest of the industry. 

Microsoft posted its quarterly and full year results this week. For the second quarter, revenue was up 15% to $64.7 billion. Devices revenue fell 11% in the quarter while Windows revenue was up 7% and Intelligent Cloud increased 19% to $28.5bn. For the full year, revenue was up 16% to $245.1bn, with net income of $88bn.

"Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft," said CEO Satya Nadella in a statement. 

“As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era.”

Capital spending rose by 77.6% to $19 billion for the fourth quarter — and most of that was on AI and cloud. Microsoft's total spend for the previous year was $55.7 billion.

In a conference call discussing the results, Microsoft said more spending would happen in the coming year. Microsoft Group CFO Amy Hood said the heavy investment was necessary to build up an AI business, but added that it "will be monetized over 15 years and beyond," according to a Reuters report.

Microsoft Azure growth 

Microsoft Cloud overall was up 21%, while Azure leapt 29% year-on-year in the second quarter. What Microsoft calls "Intelligent Cloud" posted revenue of $28.5bn versus $23.9bn the year before. 

“We closed out our fiscal year with a solid quarter, highlighted by record bookings and Microsoft Cloud quarterly revenue of $36.8 billion, up 21% (up 22% in constant currency) year-over-year,” Hood said in a statement.

While positive, that was below some investor expectations — and even though cloud revenue only just missed estimates, analysts said investors would want to see more dramatic improvements.

Daniel Morgan, senior portfolio manager at Synovus Trust, which holds shares in Microsoft, told Reuters that investors have little patience when billions of dollars are being spent. 

"If these companies do not hit it out of the ballpark and are far better than the estimates then they are going to be knocked back," he said.

The results will calm some fears that AI won't be benefiting the bottom line, but it's clear investors will continue to keep a close watch on the segment, said Forrester’s principal analyst Lee Sustar in a statement sent to ITPro.

“Investors and customers wondering whether Microsoft's AI offerings are still hauling in revenue got some assurance amid lingering questions following the company's quarterly earnings," Sustar said.

“Given Microsoft's record in recent years, Wall Street hasn't much cared that precise Azure numbers aren't disclosed," Sustar added. 

"However, the company noted that operating expenses for Intelligent Cloud grew 5% compared to the same period a year earlier due to the scale-out of AI infrastructure in Azure. Investors and Azure customers will be keeping an eye on that trend as an indicator of AI market success for Microsoft and the cloud providers generally.”

AI spending mirrored at industry rivals

The latest round of quarterly results in the tech industry highlighted analyst and investor concern around the rising costs of building AI systems and when such investments might pay off. 

Google owner Alphabet last week warned that its AI-related spending would remain high in the coming year, after posting results showing capital expenditure was up more than expected to over $13 billion in the second quarter alone.

Yesterday, Meta posted a 22% leap in revenue to $39bn — topping expectations — helped by "healthy global advertising demand", said Meta CFO Susan Li, according to Reuters.

Li said that was boosted by the use of AI to improve its digital advertising segment. While income from longer term bets like AI chat assistants will take longer to arrive, the apparent immediate benefits on advertising helped allay concerns about rising costs, which were up 7% in the second quarter.

Amazon also announced its results yesterday, recording $26.3 billion in revenue which exceeded analyst expectations. This marks a significant increase compared to the same period last year.

Capital expenditures were once again in the spotlight. Amazon CFO Brian Olsavsky said the tech giant spent just over $30 billion in the first half of 2024, and attributed much of this spending to heightened demand for cloud and generative AI services.

Olsavsky told investors the company expects AI and cloud-related investments to continue increasing in H2 2024.

Amazon has announced it reached its 100% renewable energy goal seven years earlier than previously forecast in a major push toward more sustainable operations. 

Figures from Amazon’s 2023 Global Sustainability Report show the tech giant has made significant progress in bolstering sustainability across global operations over the last five years.

In 2019, the company set a goal to match all electricity consumed across its operations by 2030. These plans included improving sustainability across data centers, corporate offices, fulfillment centers, and grocery stores.

As part of this initiative, the firm said it’s invested heavily to become the “largest corporate purchaser of renewable energy in the world” for four consecutive years.

The company has invested billions in more than 500 solar and wind projects worldwide, which it said are now capable of generating enough energy to power the equivalent of 21.9 million European homes.

Kara Hurst, chief sustainability officer at Amazon, said reaching the goal seven years earlier than anticipated marks an “incredible achievement”.

“We also know that this is just a moment in time, and our work to decarbonize our operations will not always be the same each year—we’ll continue to make progress, while also constantly evolving on our path to 2040,” Hurst said.

“Our teams will remain ambitious, and continue to do what is right for our business, our customers, and the planet. That’s why we’ll continue investing in solar and wind projects, while also supporting other forms of carbon-free energy, like nuclear, battery storage, and emerging technologies that can help power our operations for decades to come.”

Amazon has ramped up renewable energy investment

Amazon is one of several major tech companies to ramp up investment in renewable energy sources in recent years. In a statement confirming it had reached its energy goals, Amazon said it’s supported renewable projects in 27 countries globally. 

“We were the first corporation to enable utility-scale renewable energy projects in India, Greece, South Africa, Japan, and Indonesia, among other countries. To accomplish this, Amazon worked with policymakers to enable first-of-their-kind policies to help corporations support the construction of new solar and wind projects in these countries,” the company said.

In the UK, the company supports nearly 1.7 GW of capacity spanning six offshore wind farms, including Moray West off the coast of Scotland, and East Anglia Three off England’s east coast.

Renewable energy sources have also been incorporated into the company’s wider corporate footprint. For example, Amazon’s HQ2 headquarters in Virginia was built to run with zero carbon emissions, the company said. Its electricity consumption is also matched by a local solar farm.

The emergence of generative AI and the associated strain on data center power consumption has further fueled investment in renewables and alternative energy sources.

Earlier this year, Amazon announced plans to acquire a nuclear-powered data center campus as part of a major deal with US-based electricity provider, Talen Energy.

The firm’s cloud subsidiary, Amazon Web Services (AWS), confirmed it will acquire the Cumulus data center complex, located next to the 2.5 gigawatt Susquehanna nuclear power station in Pennsylvania, as part of a $650 million deal.

The deal will see AWS gain access both to the data center facility along with the power infrastructure of the adjacent nuclear station.

Amazon isn’t alone in this pursuit, either. In May, Microsoft announced it had signed a major deal with Brookfield to secure sustainable energy for data center operations. BloombergNEF described the deal as the largest corporate agreement to purchase renewable energy to date.

The motivation behind this move was to keep pace with soaring power demands placed on data center infrastructure by generative AI.

As part of the deal, Microsoft committed to invest an estimated $10 billion in renewables projects to be developed by Brookfield. The hyperscaler said this will unlock a further 10.5 gigawatts of generating capacity between 2026 and 2030 in the US and Europe.

Amazon is reportedly working on development of a new AI tool aimed at directly competing with ChatGPT as the tech giant looks to compete with the popular chatbot. 

According to reports from Business Insider, the internal project, codenamed ‘Metis’, is designed to be accessible for users via web browser.

Metis will work in a similar fashion to ChatGPT, providing users text and image-based answers in response to user queries. The chatbot will also reportedly provide links within answers to give users access to source materials used when generating a response, and even suggest follow-up queries.

Sources told the publication the chatbot will be powered by Amazon’s internal AI model, dubbed ‘Olympus’, which is also believed to be in development. Reports on Olympus emerged late last year, but as of yet no concrete details have been teased by the firm.

Development of the chatbot is being led by Amazon’s artificial general intelligence (AGI) team, which is also working on the Olympus model, and the launch of the service could come in September to coincide with Amazon’s Alexa event.

Amazon eyes RAG capabilities with Metis chatbot launch

A key differentiator for Metis, sources suggested, is that retrieval augmented generation (RAG) will play a big role in optimizing how the chatbot produces responses. 

RAG has become the latest industry buzzword amidst a flurry of AI activity over the last 18 months. This allows AI models to draw upon larger knowledge repositories such as organization-specific information, alongside user input, to inform their responses.

All told, this provides more relevant results for user queries. Metis will be no different, and will be able to source information beyond the original data used to train its supporting model, thereby providing more up-to-date responses.

Sources close to the matter told Business Insider the chatbot will be able to share the latest stock prices in real-time, for example.

Amazon plans appear to also point toward Metis acting as an ‘AI agent’. These custom chatbots essentially automate and perform tasks on behalf of the user, and are built using existing, internal data. Sources told BI that some use-cases included booking flights, or turning on lights, pointing toward close integration with Alexa.

Alongside RAG, AI agents have emerged as a major enterprise focus so far in 2024.

Google Cloud launched its own AI Agents service for Vertex AI at Google Cloud Next 2024. Microsoft-backed OpenAI also launched its marketplace for AI agents which allows users to create custom GPTs in a move earlier this year.

Amazon is entering a very cluttered market

To compete with the likes of Microsoft and Google, Amazon faces a challenge on several fronts. 

Breaking through and capturing customers in this environment will require Metis to deliver serious results. With Metis reportedly powered by Olympus, the tool carries potential to not only produce powerful outputs but also show off Amazon’s own in-house development capabilities.

That said, it’s a hard task. In the eight months since rumors about Olympus first surfaced, the AI space has moved on considerably. Gemini 1.5 Pro and GPT-4o continue to push the limits of large language models (LLMs) and unless Olympus is proven to outperform these competitors by sizable margins it could fail to catch the attention of would-be customers.

Rising capabilities of open source models like Meta’s Llama 3, which cost nothing and are already available on AWS, Azure, and Google Cloud, could also prove a hindrance here. Simple benchmark scores are no longer enough in a world where completely free models can go toe-to-toe with those made by the best AI developers.

There’s also the issue of convenience. It’s likely that as AI becomes more commonplace, businesses will choose their AI assistant that requires the least upheaval of their existing stack and as little staff retraining as possible. For example, an organization that’s already heavily invested in the Microsoft ecosystem could easily adopt Copilot versus another AI solution.

All of this said, it’s in its RAG-based approach that Metis could make the most difference. Still considered a novel technique, RAG provides assurances of accuracy that can put fears over hallucinations to bed and make AI adoption much more feasible for enterprises.

If Amazon can sell this message – ‘Metis is more reliable than the next best tool’ – it could seize the corner of the market that the company has thus far failed to make gains within.

Amazon has announced plans to pump another €10 billion ($10.7 billion) into Germany to support the expansion of its logistics network and cloud infrastructure across the country. 

As part of the investment, AWS plans to make an €8.8 billion ($9.4 billion) investment by 2026 to continue to build, maintain, and operate its cloud infrastructure for the AWS Europe (Frankfurt) Region.

This, the company said, will help it meet growing customer demand for AWS services in Germany, including AI technologies.

AWS provides a range of cloud and AI services for companies across Germany, including its flagship Bedrock framework which allows users to harness a variety of in-house and third-party large language models (LLMs).

Meanwhile, the labs at the company's R&D in Berlin will be extended to develop and enhance AI and robotics technologies.

"Germany is at the heart of innovation across Europe. AWS is more committed than ever to helping German customers lead and build new technologies and services using the wide variety of capabilities in the AWS Cloud, including generative AI," said Stefan Hoechbauer, managing director for Germany and Europe at AWS.

"To address the growing demand for our services, we’re investing heavily in Germany’s digital infrastructure. This also includes our commitment to support digital skills and talent development programmes across Germany and to partner with local communities on joint initiatives with a lasting impact."

The funding pledge means the company now has confirmed planned investments in Germany totaling €17.8 billion ($19 billion), and builds on a separate investment to expand cloud infrastructure across the country made just weeks ago.

In May, the tech giant unveiled a €7.8 billion ($8.3 billion) funding package for the AWS European Sovereign Cloud in Germany. The move marked the launch of AWS’ first sovereign cloud in the region, and will be housed in the state of Brandenburg.

AWS is one of several hyperscalers bolstering 'sovereign' cloud services in Europe to meet regulatory requirements on data residency and privacy.

The latest tranche of funding brings Amazon’s total investment in Germany to more than €77 billion ($82.5 billion) since 2010, and a total of more than €150 billion ($160.8 billion) across the EU.

Amazon eyes German workforce expansion

The company said it will also be creating 4,000 new jobs in Germany this year, at three new fulfilment centers: one in Horn-Bad Meinberg in North Rhine-Westphalia, opening later this summer; one in Erfurt, Thuringia, which opened in May; and one in Großenkneten, which opened last August. 

The new jobs will bring the company's total number of permanent employees in Germany up to more than 40,000. The company said its plans will contribute €15.4 billion ($16.5 billion) to Germany’s GDP, while supporting an average of 15,200 full-time jobs annually in the local supply chain.

"Our teams work hand-in-hand with state-of-the-art technologies to deliver for small businesses and customers, while AWS enables organisations of all sizes in Germany to grow their businesses and innovate using the cloud," said Rocco Bräuniger, Amazon Germany country manager.

"And with that comes a positive impact for the country – and especially the communities where we operate – with a broad range of investments and jobs ranging from research and development to logistics and customer service."

AI companies have signed up to a safe development pledge which could see them pull the plug on some of their own AI models if they cannot be built or deployed safely.

Companies including Amazon, Anthropic, Google, IBM, Meta, Microsoft, OpenAI and others have signed up to the frontier AI safety commitments at the AI Seoul Summit.

The companies said they would assess the risks posed by their frontier models or systems across the AI lifecycle, including before and during training, and when deploying them.

Similarly, the firms agreed to set thresholds beyond which the risks posed by a model “would be deemed intolerable”. If these limits were breached, the companies said they would cease further development..

“In the extreme, organizations commit not to develop or deploy a model or system at all, if mitigations cannot be applied to keep risks below the thresholds,” the document said.

In broader terms of AI safety, the companies also agreed to stick to best practice, like internal and external red-teaming of frontier AI models for novel threats; to “work toward” information sharing, develop ways to help users know if audio or visual content is AI-generated, and to publicly report model capabilities and limitations.

The commitments are voluntary and come with plenty of caveats, however. The document noted that “given the evolving state of the science in this area, the undersigned organizations’ approaches…may evolve in the future”.

Alec Christie, partner at global law firm, Clyde & Co, said the rapid pace of innovation in the generative AI space makes it very difficult to introduce legislation due to the fluid, ever-evolving nature of the technology.

“The newly signed Seoul Declaration is a step in the right direction to establishing global fundamentals on AI regulation, but there is a time limit on all of this,” Christie said.

“AI development is happening at such a rate that the regulation just can’t keep up, as it could become outdated as soon as it is implemented.”

The companies also agreed to provide “public transparency” on the implementation of the AI safety strategy - so long as that doesn’t reveal sensitive commercial information “to a degree disproportionate to the societal benefit”, although they agreed to share more detailed information with governments.

Generously, the organizations also promised to “to develop and deploy frontier AI models and systems to help address the world’s greatest challenges”.

AI safety in the spotlight once again

The Seoul summit follows from the first AI Safety Summit held at Bletchley Park in the UK last year, which set out some of the big concerns about AI. 

While AI can bring big advances it can also create big risks, with new cyber security threats and novel biotechnology risks as well as the rise of disinformation all getting a mention.

“There is potential for serious, even catastrophic, harm, either deliberate or unintentional, stemming from the most significant capabilities of these AI models,” the Bletchley declaration said.

For now, many countries – apart from China and the EU - have stopped short of creating specific legislation around AI risks and have preferred to go down the route of a broadly voluntary approach.

Part of the problem is nobody can quite agree on what AI safety should cover, and many countries are also worried that, if they put in place stringent regulation, they may lose out economically to other regions with a more relaxed approach.

The UK’s approach, for example, has been to set up an AI Safety Institute (AISI) to look over some of the models.

However, researchers at the Ada Lovelace Institute have warned that the voluntary approach being followed right now has some big flaws.

Existing methods of evaluating AI models are easy to manipulate, they warn, and small changes to the models can have big consequences. And looking at a foundation model may shed very little light on the risks and impacts of the apps built on it.

They contrast this with other sectors such as pharmaceuticals, where companies have to hit standards set by regulators, and regulators have the ultimate say in whether a product can be released.

The researchers are calling for powers to compel companies to provide AISI and regulators with access to AI models, their training data and documentation.

“These access requirements could be unilaterally imposed as a prerequisite for operating in the UK – a market of nearly 70 million people,” they said in a blog post.

The researchers said the AISI and other regulators should have the power to block the release of models or products that appear too unsafe, such as voice cloning systems, which can enable fraud.

“Conducting evaluations and assessments is meaningless without the necessary enforcement powers to block the release of dangerous or high-risk models, or to remove unsafe products from the market,” they said.

The rate at which AI is being deployed has outpaced the ability of governments and even companies themselves to test these systems and manage their use, they argue.

“This is bad for the public, who are already being affected by the misuse of these technologies and their failure to act as intended. It’s bad for businesses, who are being told to integrate the latest forms of AI into their products and services without meaningful assurance,” they warned

“And given how little we know about the longer-term societal impacts of these systems, it risks unleashing longer-term systemic harms in much the same way as the unchecked rollout of social media platforms did more than a decade ago.”

AWS has announced the general availability of its Amazon Q generative AI developer assistant, the latest entrant into an increasingly crowded market of coding tools.

The tool, unveiled at AWS re:Invent in November last year, can generate code, test and debug code, and has ‘multi-step planning’ capabilities that can allow it to perform Java version upgrades and implement new code generated from developer requests.

When first announced, the move marked AWS’ first major foray into the AI chatbot space, which has become somewhat saturated with a range of tools from competitors such as Google Cloud and Microsoft.

Speaking to ITPro at the conference, IDC analyst Neil Ward-Dutton said the tool could be a key differentiator for the firm in the current generative AI battle between hyperscalers.

What is Amazon Q?

Amazon Q is built on the previous AWS coding assistant Amazon CodeWhisperer, and incorporates some of its features such as in-line code suggestions and security scanning, but adds more features on top of that. 

In terms of pricing, there’s a Q Developer free tier, and a Pro option with wider functionality which allows customers to customize the tools to their codebases, at $19 per month per user.

AWS said that developers only spend 30% - or less - of their time on coding, while the rest is spent performing tedious and repetitive tasks. They have to manage infrastructure and resources, troubleshoot and resolve errors, test and refactor code, upgrade applications, and carry out vulnerability scanning.

All of this is necessary but doesn’t help the business to move forward.

“Companies want to empower their developers to spend less time on this coding muck and more time on creating unique experiences for their end users, while being able to deploy faster,” it said.

Amazon Q isn’t just focused on developers, however. AWS said variations of the tool can also be used by staff without developer skills to build apps, and by business analysts and other staff to find information in corporate systems.

According to a survey by Gartner, two-thirds of organizations are piloting, deploying or have already deployed AI coding assistants. GitHub Copilot is the most used and best known of these tools but there are plenty of challengers, including Google Cloud’s Gemini Code Assist and Meta’s Code Llama.

There have been rumors that Apple is working on an AI coding tool of its own, too.

What does Amazon Q offer users?

AWS has detailed a number of features or Amazon Q. Chief among these are coding recommendations for users. 

AWS said Amazon Q can generate code suggestions and recommendations in ‘near’ real time. Q can also learn from customers’ internal code base to provide more relevant recommendations. Q keeps these customizations private, and the underlying foundation model does not use them for training.

Andrew Brydon, executive chief engineer at National Australia Bank said Amazon Q Developer has helped his developers complete tasks faster, increasing productivity and minimizing repetitive actions. He said the bank’s developers have accepted 50% of the code suggestions made by Amazon Q Developer.

Another customer, BT Group, said devs were accepting 37% of suggestions, while health tech company Netsmart said it has seen a “strong” code suggestion acceptance rate of 35%.

“This has allowed our engineers to efficiently generate high-quality code and documentation, implement new features, which can accelerate development cycles, and significantly reduce manual effort,” Netsmart said.

AWS has been keen to highlight the potential of Amazon Q Developer Agents, which can be built by users to carry out tasks such as code refactoring or performing software upgrades.

The firm said developers can ask Amazon Q to add a feature and the agent will analyze the existing application code and generate a step-by-step implementation plan. Developers review and tweak the plan before the agent implements it, applying updates across source files, code blocks, and test suites.

AWS said Q can also automate and manage the upgrade process. Java conversions are available today and .Net conversions are coming soon.

Notably, AWS said a five-person team at Amazon used Q to upgrade more than 1,000 production applications from Java 8 to Java 17 in just two days (with the average time per application at less than 10 minutes). Previously, the company said, many of these applications would have each taken a couple of days to upgrade.

Gerardo Arroyo, CTO of tech company Novacomp said his team had used Amazon Q Code Transformation to help upgrade a project running on Java 8 to Java 17 with over 10,000 lines of code. 

This is a task that would take two weeks to manually complete, he said, but Amazon Q did it in minutes. “Since adopting Amazon Q across our organization, we have realized a 60% decrease in average in our tech debt,” he said.

Amazon Q will also include security vulnerability scanning and remediation capabilities. This includes the ability to scan code for flaws, such as exposed credentials and log injection.

Similarly, the tool can suggest remediations tailored specifically to the application code.

IT pros can also ramp up cloud optimization capabilities using Amazon Q, according to AWS.

Amazon Q Developer will be embedded in the AWS console to help users optimize cloud environments, as well as diagnose and resolve errors or networking issues, select instances, and optimize SQL queries.

It includes a new feature to help customers list their AWS account resources, configurations, and analyze billing information and trends.

For example, AWS said IT pros can ask, “What instances are currently running in US East 1?” or “What’s my S3 bucket encryption?” and the tool will list the resources and details.

What is Amazon Q Business?

Q Business is a generative AI–powered assistant that can answer questions, provide summaries and generate content based on data in enterprise systems. It can connect to business tools, such as wikis, intranets, Atlassian, Gmail, Microsoft Exchange, Salesforce, ServiceNow, Slack, and Amazon S3. 

“Simply point Q at your enterprise data repositories, and it will search all of your data, summarize logically, analyze trends, and engage in dialog with end users about the data,” AWS said.

With Amazon Q in QuickSight, Amazon’s business intelligence service, analysts can use natural language to build BI dashboards in minutes and easily create visualizations and complex calculations.

Ed Sarausad, senior director of Data & Analytics at GoDaddy said Amazon Q in QuickSight allows its staff to ask our data contextual business questions without having to constantly rely on ad-hoc dashboards.

“For example, now we can much more easily discover and drill into anomalies in business performance across the company,” he said. Amazon Q Business is charged at $3 per month for the ‘Lite’ version and $20 for the ‘Pro’ version.

What is Amazon Q apps?

AWS also detailed Q Apps, currently in preview, which is said can allow employees to create generative AI-powered apps based on their company data, “without requiring any prior coding experience”. 

AWS gave the example of creating an employee onboarding app.

“With Q, an HR professional could simply describe they want an app that will create an onboarding plan for a new employee that utilizes the company’s existing best practices, and has an input field for employee ID that personalizes the onboarding plan to their role by drawing from internal data sources specific to their job family,” AWS said.

The Competition and Markets Authority (CMA) is pushing ahead with an investigation into AI deals struck by Microsoft and Amazon, but some industry stakeholders warn the move could hamper innovation in the space.

Earlier this month, the competition watchdog said it was concerned that certain partnerships could be entrenching market dominance by the firms - and it is now following through by calling for comments from interested third parties.

The CMA initially raised concerns about what it described as an 'interconnected web' of more than 90 partnerships and strategic investments involving the same firms, along with Microsoft’s hiring of former employees and related arrangements with Inflection AI.

"We will assess, objectively and impartially, whether each of these three deals fall within UK merger rules and, if they do, whether they have any impact on competition in the UK," said Joel Bamford, executive director of mergers at the CMA.

Specifically, it plans to look into a partnership between Amazon and Anthropic, which saw the tech giant pledge support to the tune of $1.25 billion in September 2023, with a further $2.75 billion in March this year.

The deal also includes agreements for purchasing computing capacity, and non-exclusive commitments to make Anthropic models available on Amazon’s Bedrock service.

Meanwhile, the CMA will focus attention on Microsoft’s recent deal with Inflection AI which saw CEO and co-founder Mustafa Suleyman join the firm to lead its new consumer AI division.

The tech giant’s deal with French AI startup, Mistral, will also be examined. Under the terms of the deal, Microsoft will supply Mistral AI with its Azure supercomputing infrastructure, and Mistral’s models will be made available on Microsoft’s Azure platform.

While calls for heightened regulatory scrutiny on these deals have been growing, some industry stakeholders are concerned that the move from the CMA could hamper innovation and confidence in the AI space.

The Computer & Communications Industry Association (CCIA) warned that the CMA should act proportionately and avoid risking the UK’s reputation for responsible regulation.

"The CMA needs to be cautious as a formal investigation into a modest partnership agreement, based on speculative concerns, could be hugely disruptive and deter investment in vitally important AI innovation," said Matthew Sinclair, the CCIA's senior director, UK.

Sinclair suggested that if commercial agreements such as these are “held up by overly broad and premature” regulatory scrutiny, this could dissuade some businesses from investing in the future, thereby “undermining competition in what is currently a dynamic market”.

Welcome to ITPro's live coverage of the 2024 AWS Summit London, live from the ExCel conference center. 

We've got a jam-packed day ahead of us at the summit, and we can expect to see a raft of UK and EMEA-related announcements from the cloud computing giant. 

This morning's keynote session will begin at 10am, and will feature updates from Tanuja Randery, managing director, EMEA, at AWS alongside Francessca Vasquez, VP of professional services & Generative AI Innovation Center.

We can expect to hear a lot about Amazon Bedrock, the tech giant's large language model (LLM) framework, at the summit today. Generative AI is still very much the talk of the town in the tech world.

Crowds are pouring into the ExCel now, and there's certainly a real buzz around the conference center ahead of the opening keynote session. 

Key talking points to look out for today will likely be ongoing infrastructure expansion for AWS in the UK. The cloud computing giant has invested heavily in the country over the last two years alongside counterparts such as Microsoft and Google Cloud. 

There's not been much movement on this front over the last few months, however, so attendees and customers will no doubt be keen to hear about any developments during the opening session. 

It's an impressive-looking stage for AWS Summit London 2024, fit with booming speakers and festival-style lighting, and the crowds are flooding in eagerly ahead of the day’s keynotes. 

While we wait, why not check out some of our recent coverage on AWS here: 

• AWS ups its cost-visibility game with free-to-use offering for Kubernetes clusters

• AWS fined $525 million after US court rules Amazon S3 storage, DynamoDB services infringed patents

AWS has gone all out for London this year with this keynote banner! 

AWS Summit is kicking off with a bang and an exciting visual display, chocked full of forward-looking taglines - “let’s build what’s next” is the video's parting message. First up is Tanuja Randery, Managing Director of EMEA at AWS as…a digital avatar? 

The real Randery eventually makes an appearance to spirited claps and cheers, going on to talk about what’s in store for the day. The pace of innovation is key for Randery it seems, and she also takes a moment to shout out the UK: 

“We have invested 3 billion to build and operate data centers in the UK” Tandery said proudly. 

Amazon Bedrock is coming to the London region

The first big announcement is that Amazon Bedrock is coming to the London region with the promise of unlocking great benefits for UK businesses. Tandery says she wants every UK business to have the opportunity to compete on the world stage as part of this latest announcement. 

Climate and digital skills

Tandery touches on issues of climate, talking up the benefits of the cloud for any business that wants to go green. Similarly, she references the importance of digital skills, speaking about how AWS is helping train IT workers. 

AWS Restart, for example, is a twelve-week training program that Tandery refers it, citing a particular student who excelled as part of the program. 

AWS looks like it wants to make its mark in the UK as a cloud provider for the future. 

Next up is Francessca Vasquez, Vice President of Professional Services at the firm. She takes us back in time, going over some of the most revolutionary inventions of human history, building to the current advents of cloud and generative AI. 

Mention of Amazon's origins as an online retailer is a welcome reminder of how far the company has come, with Vasquez describing AWS as a “pioneer of the cloud”.

We have enabled customers to “transform the world around us,” she says, referring to some of the big household names reliant on AWS like Netflix and Moderna.

“We are on the precipice of another tectonic change”

Generative AI had to get a mention of course, as Vasquez moves on to talking about how the new technology will shape a new world. 

She mentions the cost savings of Lonely Planet, which has been using Anthropic on Amazon Bedrock for its itinerary processing, and some of the scientific applications of AWS’ products in other companies. 

Vasquez now invites Philip Belamant, Co-Founder and CEO of Zilch, to the stage to talk about the company's journey with AWS, who begins by talking about all the money wasted when paying with credit. 

This is the world’s first “AD-Subsidized-Payments-Network”

He talks about Zilch’s mission, to free up money for customers through credit purchases. By connecting lending with ad networks, customers can find companies that are willing to offer better credit in terms of purchases.

“The customer has taken out a line of credit and has paid zero interest and zero fees,” he says. 

This is the world’s first “AD-Subsidized-Payments-Network” the Zilch co-founder says. 

And, if you hadn’t guessed, this platform is built on AWS, though Zilch is planning to deepen its relationship with AWS in the pursuit of new AI use cases, such as “buyer-intent prediction”. 

Amazon SageMaker and Amazon Bedrock are at the heart of this announcement.

Now Vasquez is back on the stage, again talking about generative AI and some of the pain points that AWS customers have had in adopting the technology. She talks about the “generative AI stack” at the firm and the provisions AWS has for customers to start taking advantage of AI. 

While many in the room may not be building foundation models, she says, AWS is making sure that access to the power of these models is possible. AWS is also, apparently, the “best place to run GPUs in the cloud”. 

“We’re investing the middle layer of the stack”

AWS has been investing in Bedrock to provide users with an effective middle ground for AI use and deployment. Bedrock, as a fully managed service, provides users with ease and consistency of access to generative AI. 

“No one model will rule them all,” Vasquez says, explaining why AWS’ mission is so important in terms of bringing all the generative AI possibilities to anyone who needs them. 

Good data = Good AI

This is key, Vasquez says, as effective generative AI tools rely on huge and well organized pools of data to be fully utilized. 

To illustrate this point, Vasquez plays a video about Adobe, which apparently has an excellent understanding of its data as a company. The key to transformation is data, Vasquez reiterates. 

“You can now use generative on AWS” to have a transformative effect, Vasquez says.

Next up, it's Pieter Jordaan, CIO at TUI, up on the stage to talk about how AWS helped the travel firm up its generative AI game. 

“The travel industry is incredibly dynamic,” Jordaan says. It requires firms to be adaptive - during COVID-19, for example, companies need to turn down their operations.

TUI was different, though. During COVID-19, Jordaan says, TUI went all-in on AWS in an overhaul of a cloud-native platform, amongst other things. 

“We increased our model deployment on Amazon SageMaker by 1000% in one year,” he says. 

AWS was TUI’s backbone for generative AI adoption

Using Bedrock to manage foundation models, TUI was able to use generative AI to create effective, SEO-focused content for personalized customer experiences. Amazon Bedrock gave us the “enterprise-ready” platform we needed to scale generative AI, Jordaan says. 

Jordaan says TUI is also rolling out Amazon Q to its developers to increase efficiency. 

Back to Vasquez who’s got a bit more to say about generative AI. She talks about how customers want AI with speed and ease and without machine learning expertise.

Que Amazon Q, AWS’ generative AI-powered assistant specifically designed to help out at every stage of the development lifecycle.

Vasquez talks the audience through some practical use cases, demonstrating via a visual representation on the on-stage screen. 

It provides a good balance between “speed and efficiency”, she says, making generative AI use simple for even those who lack training in the technology. Amazon certainly seems focused on giving Github Copilot a run for its money, as well as Gemini Code Assist.

Q is designed to deliver “more accurate and relevant results” and, with a few lines of code, retrieval augmented generation (RAG) knowledge bases can be easily accessed. A customer such as BT Group is seeing notable improvements from the use of Amazon Q already, according to Vasquez. 

“There has never been a better time to be a builder”

This is a breakthrough moment in technology, Vasquez reiterates, and those building on AWS are part of the exciting future that all this new technology promises. She finishes the keynote with an inspiring question: 

“What magic will you go off and build?”

And on that note, the keynote is over and crowds mill out of the auditorium to go and soak up the rest of AWS Summit London 2024. 

Google CEO Sundar Pichai has told staff to expect more job cuts amid a concerted effort to “drive velocity” at the tech giant across 2024.

In an internal memo distributed to staff, and seen by The Verge, Pichai said the layoffs will enable the tech giant to cut expenditures and support its goals for the year ahead.

“We have ambitious goals and will be investing in our big priorities this year,” the memo reads. “The reality is that to create the capacity for this investment, we have to make tough choices”.

The current cost-cutting measures are aimed primarily at “removing layers to simplify execution and drive velocity in some areas”, Pichai told staff.

The announcement comes just days after the company announced a fresh wave of layoffs.

Google confirmed more than 1,000 staff would be let go from the firm late last week, with workers spanning several divisions – including its voice assistant unit and staff in its Pixel and Fitbit segments – affected by the move.

For staff concerned about a pending torrent of job losses, Pichai noted that the current drive to reduce numbers won’t be on the scale of last year’s spate of layoffs.

“These role eliminations are not at the scale of last year’s reductions, and will not touch every team,” he said. “But I know it’s very difficult to see colleagues and teams impacted”.

Pichai’s attempts to calm worker fears will offer little solace for those who could be impacted, however. It’s been a challenging 12 months for staff at the firm, who were first rocked with a round of cuts in January 2023.

The tech giant announced it would cut 12,000 roles spanning multiple departments, equivalent to roughly 6% of its global workforce.

The company said deteriorating economic conditions and a period of over-hiring across 2021 and 2022 were key factors in the decision.

With a 6% reduction in its workforce, these cuts were among the largest during the flurry of layoffs during early 2023 - particularly compared to direct competitors.

Microsoft and Amazon, both of which also announced job losses in January, cut the equivalent of 5% and 3% respectively.

Google is prioritizing AI at any cost

Despite mass cuts, the tech giant pursued a highly aggressive investment strategy in a bid to ramp up generative AI innovation across 2023. 

Google was caught off-guard by Microsoft in late 2022 during the early days of the generative AI 'boom', prompting it to rapidly pivot to focus on the technology.

In December last year, the company was reportedly in a state of 'code red' and upended internal teams to focus on AI development to keep pace with Microsoft.

Since then, the company has unveiled a host of new AI-powered products and services, culminating in the launch of its flagship ‘Gemini’ AI model in early December, which it has positioned as a direct competitor to OpenAI’s GPT-4 model.

Revenue figures at the company also stabilized after what was a challenging period in 2022. In Q3 2023, the company recorded a return to double-digit growth while earnings in its advertising segment also bounced back.

Google’s razor-sharp focus on AI has also been the source of some layoffs already, with hundreds of employees cut from its ad sales team.

The majority of these have been in the “Large Customer Sales” team, which works with the tech giant’s largest advertising clients.

A report from The Information in December 2023 said that a portion of staff were cut from the division or reassigned due to certain roles being replaced by AI.

European tech companies and industry groups have demanded better communication from tech “gatekeepers” ahead of the introduction of the EU’s Digital Markets Act (DMA).

An open letter from tech companies including VPN firm Proton and search engine Qwant, as well as industry bodies including the European Tech Alliance, said that the thousands of businesses they represent were worried about a lack of "effective" engagement from the companies that have been designated gatekeepers under the DMA.

“Gatekeepers have either failed to engage in a dialogue with third parties or have presented solutions failing short of compliance with the DMA,” the letter said.

“Businesses and consumers are largely kept in the dark as to what is going to happen after 7 March 2024,” the letter said.

In September 2023, the European Commission said that Google’s parent company Alphabet, along with Amazon, Apple, ByteDance, Meta, and Microsoft were considered ‘gatekeepers’ under the DMA.

Under the terms of the legislation, the European Commission can designate companies as gatekeepers if they provide a key ‘gateway’ between businesses and consumers through their core platform services.

In this case, the EC said it counted 22 core platform services in total across the six gatekeepers in areas including search, social networks, browsers, operating systems, and video sharing.

The new rules establish new obligations for gatekeepers, which have six months to ensure compliance for each of their core platforms. That means they have until 7 March to get ready.

How the Digital Markets Act will work

For example, in some situations, they may have to allow third parties to interoperate with their own services, enable business users to access the data they generate by using the gatekeeper’s platform, and provide companies advertising on their platform with tools to carry out their own independent verification of their ads.

Gatekeepers will also be forced to allow businesses to promote their offers and make deals with customers outside the gatekeeper’s platform.

According to the EC, gatekeeper platforms can no longer treat their own services and products more favorably in ranking, or prevent consumers from linking up to businesses outside their platforms.

They also can’t stop users from uninstalling any pre-installed software or app, or track end users outside of the gatekeepers' core platform service for advertising without their explicit consent.

The consequences of non-compliance can be painful for these gatekeepers, including fines of up to 10% of the company’s total worldwide annual turnover, or up to 20% in the event of repeated infringements.

In their letter, the European tech firms and industry groups said the DMA will affect how millions of consumers and business users interact with social networks, app stores, online shopping, video sharing services, and more.

“It will constitute a paradigm shift in digital markets, with one fundamental objective: the creation of fair and contestable digital markets in Europe,” the letter reads. “It should put an end to anticompetitive practices that led to higher prices for consumers and slowed innovation in Europe.”

The launch of the Digital Markets Act in March 2024 will mark the “beginning of the new era”, the consortium said, and one that will improve competition for smaller businesses across the union.

“It would be regrettable if that new era began with a false start, which will happen if the gatekeepers do not constructively engage with third parties, including business users and consumer associations, before 7 March on how they intend to comply with the DMA,” it said.

The letter said the gatekeepers should engage “as soon as possible” with businesses and others in a constructive dialogue and make "swift progress on their proposed compliance solutions".

The launch of ChatGPT in November 2022 sparked a torrent of generative AI investment as businesses globally looked to capitalize on the transformative potential of this technology. 

Across the year, AI startups raised more than $68.7 billion, according to data from Pitchbook, underlining the serious appetite among investors to back up-and-coming players in the space.

Tech giants such as Microsoft, Google, and Amazon, have also pledged significant funding for generative AI startups, with Microsoft in particular pouring billions into OpenAI in a bid to integrate AI tools and applications across its product portfolio.

With such huge volumes of funding pouring into AI companies over the last 12 months, it’s been hard at times to keep track. 

To keep you in the loop, ITPro has pulled together a list of some of the biggest generative AI investment deals of 2023.

Generative AI investment: Who scored big in 2023?

OpenAI

ChatGPT creator OpenAI has quickly become synonymous with the generative AI boom. They've inspired a host of copycat tools, and they’ve garnered an impressive amount of funding. 

Though they have several investors, Microsoft’s $10 billion investment in January is the most notable.

They’ve raised about $11.3 billion in total over the course of the year, clearly intent to maintain a lead over their competition. The close relationship between Microsoft and OpenAI has been a source of concern for regulators in recent months, with the ties between the two being equated to a merger.

What’s clear, however, is that Microsoft views OpenAI as an integral part of its ambition to continue leading the generative AI race and differentiate it from competition.

OpenAI tools have been integrated across the length and breadth of Microsoft’s product portfolio, from Copilot support in Windows and Azure to Microsoft 365, OpenAI is woven into the very fabric of the tech giant’s offerings.

Databricks

AI-powered data intelligence platform Databricks has been quietly securing a hold in the generative AI market with ambitious plans for a new AI-based data intelligence platform. 

The company raised $500 million in September, bringing their current valuation up to a whopping$43 billion. 

While Databricks hasn’t quite shared the limelight to the same extent as other industry players, this company is innovating at pace and has even been on an acquisition spree of its own this year.

In October, the firm announced it had acquired enterprise data company Arcion in a deal valued at around $100 million.

Databricks has also been an outspoken critic of counterparts in the space and has addressed concerns that major players in the AI industry appear intent on domination. 

In June, a senior company figure told ITPro that OpenAI and other tech giants have “widely overstated” the dangers of AI in a bid to create a stranglehold on the industry.

Mistral AI

Emerging as Europe’s answer to OpenAI, Mistral recently secured $415 million in a Series A funding round that ended in early December. 

This funding round saw the French startup's valuation surge to around $2 billion.

Following this investment, Mistral AI announced a partnership with Google Cloud. Though the deal was not financial, it will likely align Mistral with Google’s AI plans going forward.

Mistral is now one of a number of emerging AI innovators that have secured backing from major industry players, and in the year ahead all eyes will be on the Paris-based firm as it prepares for a battle with US rivals.

Inflection AI

Inflection AI, the firm behind conversational AI chatbot Pi, raised a whopping $1.3 billion in funding in June as part of a funding round that involved major industry players such as Microsoft and Nvidia. 

This funding round took Inflection’s valuation to around $4 billion.

Much like Databricks, Inflection has been quietly innovating this year and doesn’t appear to have shared the same hype and hyperbole as industry players like OpenAI. That’s not to say it isn’t making waves, however.

In November, the firm debuted its flagship large language model (LLM), Inflection 2. This powerful model can outperform most industry models, the company said at the time, with the exception of GPT-4.

Anthropic

Anthropic has had a stellar year that saw the OpenAI rival raise a combined total of around $6 billion. 

In September, AWS announced it would invest $4 billion in the San Francisco-based firm and become its primary cloud provider. Hot on the heels of this backing, Google also pledged its support for Anthropic in a $2 billion deal.

Anthropic, it seems, has found itself in a unique position this year with the backing of two of the three major hyperscalers. AWS and Google appear to view Anthropic as their preferred champion to contend with OpenAI in 2024 and beyond.

Just this week, Anthropic also unveiled plans to raise an additional $750 million in funding as part of a round led by Melo Ventures. Anthropic is certainly one to watch in 2024.

While the curtain may have closed on the day two keynote at AWS re:Invent, momentum at the annual flagship conference shows no sign of slowing. 

AWS CEO Adam Selipsky began proceedings on Tuesday in the opening keynote, showcasing the cloud giant’s meteoric performance so far this year and its unrelenting pursuit of dominance in the generative AI space - and it certainly appears to be working.

A slew of new product announcements flowed throughout his enthusiastic two-hour keynote, including the exciting launch of Amazon Q, the firm’s AI assistant that could prove to be a game changing move for AWS in the ongoing AI race.

Updates to Amazon S3, deeper ties with Nvidia, and more intuitive, security-focused features for Amazon CodeWhisperer made for a truly captivating day. And we were just hours into the conference.

Bedrock steals the show at AWS re:Invent

Day two at AWS re:Invent saw Swami Sivasubramanian, VP for data and AI at the cloud giant take to the stage. Sivasubramanian’s keynote was almost too much to take in at times, giving attendees a series of rapid-fire product announcements spanning virtually every aspect of AWS operations. 

Amazon Bedrock, the firm’s LLM framework which gives users access to a host of both in-house and third-party foundation models, saw two big announcements.

Anthropic’s Claude 2.1 foundation model, which launched last week, will now be available for customers using the platform. Claude 2.1 is a behemoth of a foundation model. Offering a 200k token context window, the model is twice the capacity of the previous iteration, and more than three times that of GPT-4.

And it’s far more accurate. This latest model has halved the number of ‘hallucinations’, whereby a model presents false information as factually correct.

Meanwhile, Meta’s Llama 2 70B model will also be plugged into the platform. An equally impressive open source model, Llama 2 is specifically fine-tuned for chase use cases, Sivasubramanian told attendees.

Bedrock customers could soon become swamped with a plethora of tantalizing options, but this is far from a bad thing. The framework is fast becoming an unrivaled platform for organizations seeking to dab their hands in generative AI and unlock marked improvements to operational efficiency.

Amazon SageMaker announcements

In addition to Bedrock announcements, Sivasubramanian revealed a slew of new capabilities for Amazon SageMaker, the firm’s managed service that allows customers to build AI tools in a cost-effective manner. 

The launch of SageMaker HyperPod will likely be an impactful addition to the AWS portfolio, offering users the ability to accelerate model training times by around 40% and significantly reducing both the strain and cost of training AI models.

Model training has proven a cumbersome, intensive process for organizations so far, and AWS’ attempts to reduce this burden could prove vital for customers.

Research from CCS Insight in October suggested that “prohibitive” deployment and training costs could even harm adoption rates in 2024. 

"This is a big deal," Sivasubramanian told attendees.

This was complemented by the launch of SageMaker Clarify. The application allows customers to evaluate and compare the best models based on their unique business needs.

Throughout the first two days, AWS has been keen to emphasize the importance of experimentation at enterprises to help them identify the best models based on their unique requirements. Clarify could be critical for those still on the fence during those tentative early adoption phases.

A growing number of Titan models

New Titan foundation model launches topped off what was an action packed keynote session during day two. 

Amazon’s powerful in-house models - available via Bedrock - are joined by the new Amazon Titan Multimodal Embeddings model and the Titan Image Generator.

The first of these will help customers produce more accurate and contextually relevant search experiences for end users, Sivasubramanian said.

"This enables you to build richer multimodal search and recommendation options," he said. Customers are already using the foundation model, he added, noting that it has enabled some to unlock marked improvements in user search experiences.

"Companies like Opera are using Titan multimodal embeddings to enhance search experience for customers."

The Titan Image Generator appears perfect for organizations operating in the retail, media, or advertising spaces. This model can produce realistic images based on natural language prompts and will also include invisible watermarks to ensure transparency.

A brief run through of the process for creating images through Titan Image Generator showed it to be a highly intuitive and easy-to-use platform.

Sivasubramanian said the model is specifically trained for a “large array of domains”, meaning that businesses spanning multiple industries will likely benefit.

ITPro is live on the ground in Las Vegas for AWS re:Invent 2023. To keep tabs on all of our coverage at the conference, subscribe to our newsletter or follow our daily live blog.

AWS has unveiled its new Amazon S3 Express One Zone storage offering, promising marked performance and speed improvements on its standard edition. 

CEO Adam Selipsky revealed the move during his keynote address at the annual AWS re:Invent conference in Las Vegas today alongside a slew of product updates which included the launch of its ‘Amazon Q’ generative AI assistant.

Selipsky told attendees that One Zone represents the next iteration of the popular cloud storage offering, which is 17 years old at this stage.

The new high-performance, low-latency storage class offers a 10x improvement on data access speeds in addition to a 50% lower request cost compared to Amazon S3 standard.

This equates to single-digit millisecond data access for customers.

The update comes amid a period of intense ML and AI-related workload demands from customers, the company said in a statement.

“Amazon S3 Express One Zone is the most performant storage class for request-intensive operations such as machine learning (ML) training and inference, interactive analytics, and media content creation,” the firm said in a statement.

Amazon S3 Express One Zone is tailor-made for AI 

Focusing heavily on supporting intensive AI workload capacities, AWS confirmed the launch of a new bucket type, dubbed an Amazon S3 directory bucket.

The cloud giant said customers will be able to create new directory buckets “with just a few clicks”, allowing them to upload new objects directly or copy objects from existing datasets in other S3 storage classes.

Traditionally, customers have been able to choose specific AWS Regions to store S3 data. However, the latest update also means users can now choose to co-locate One Zone data in the same availability zone as compute resources.

AWS said this will help “lower compute costs and run workloads faster”.

“Millions of customers rely on Amazon S3 for everything from low-cost archival storage to petabyte-scale data lakes, and they want to expand their use to support their most performance-intensive applications where every millisecond counts,” said James Kirschner, GM for Amazon S3 at AWS.

“Amazon S3 Express One Zone delivers the fastest data access speed for the most latency-sensitive applications and enables customers to make millions of requests per minute for their highly accessed datasets, while also reducing request and compute costs.”

The announcement marks the latest major update to Amazon S3 in recent years and underlines the continued longevity – and popularity – of the service.

In 2021, the tech giant added S3 Object Lambda, a service which enabled users to add their own proprietary code to process data retrieval from buckets before it is returned to an application.

2021 also saw the addition of the S3 Glacier Instant Retrieval function, also unveiled at its re:Invent conference.

The archive storage class offered low-cost storage for older datasets that are typically not accessed.

Three years on from the switch to remote work, I know what I want in my home. A work machine that is also flexible enough to take into the office. The function of a desktop PC, but with the portability of a laptop. A futuristic feel, like the inclusion of a voice assistant that’s actually useful (back off Cortana). 

I don’t want a foldable display that I can doodle on or a portable PC that doubles as a fitness buddy. I don’t want a ‘hybrid’ device that I can play on, I want a work machine that suits in-office and remote work.

After years of consumer-aimed ‘hybrid’ devices, I am so very pleased to see Amazon’s WorkSpaces Thin Client. This is a new enterprise offering from the cloud computing giant that aims to make hybrid work hardware simpler to use, deploy, and procure. It also happens to be very cheap. 

While this isn’t new hardware as such, given that it’s just an Amazon TV Cube with a new function, it’s a welcome release by Amazon. The cube unit now connects to peripheral devices – monitors, keyboards, headsets – and it can be used to connect to your virtual desktop. There’s an added layer of firmware and IT departments can also connect to them remotely. It sounds all very simple, but I want to underscore the brilliance of that modification; with one new software stack, Amazon has come up with a better solution to hybrid work than every other hardware manufacturer has over the last three years. It has made something that fits into tight IT budgets. And, it may have built the greatest mini PC of all time – bold, I know, but hear me out.

TV Cubes work with Alexa, so while this will connect to a monitor, keyboard, and mouse, users can also talk to it. And not in the fashion of Apple's Siri, which only really comes up on my Mac by accident. It’s not annoying like Cortana on Windows machines either. Alexa is the most used and reliable voice assistant around and it's always getting better. I like that I can sit and type out an article or email, but simultaneously ask Alexa to look something up. While I’ll likely use it to summon a Spotify playlist while I work, it can also be used for more intensive use cases, like data analysis or information searches. 

This is the direction the PC market is heading. I was at HP Imagine back in September and the firm’s president of personal systems, Alex Cho, predicted that the PC would see more changes based on artificial intelligence (AI) and become more of a personal computer. No one predicted that Amazon would have already begun building it, but in fairness it has not had to change much; this is an elegant rethink of an existing product. 

Every hardware demo, showcase, and launch I’ve been to over the last three years that had some kind of ‘solution’ to hybrid work has catered too much to the consumer or the ‘creatives’. Display size and quality take precedence over actual business functions, which makes these devices something of a hard sell for ITPro’s audience. IT decision-makers need business hardware, not massive color-accurate screens or something they can also stream movies on. 

The consumer side of any firm drives lots of its innovation because they are likely the ones bringing the money in. But we are in danger of forgetting what computers do best: jobs. And I like to hear how new ones will help me do my job, regardless of where I work.

When I daydream about starting a business, the thought of kitting out employees with hardware brings me back to Earth. They’re not going to have MacBooks or models of Dell’s XPS. They should be thankful for the imaginary Chromebooks I hand out. And I see that from both sides. Requesting a Mac (any Mac) from our IT department comes with guilt because I know they’re struggling to shift shoddy notebooks, machines with two-hour battery life and very world-weary lids. At the time of purchase, those were probably very expensive. 

That’s what makes me believe Amazon’s WorkSpaces Thin Client to be a brilliant idea. At just $195 it is super cheap – almost half the price of the most affordable Chromebook Plus model. I’d feel much more comfortable sending out a sub-$200 device to remote workers compared to over $500 on one of the best business laptops. Most offices are already kitted out with keyboards and monitors, and I would argue that serious remote workers have those already. Even if they don’t, peripherals hardly drive the cost up to that of a good laptop.

As we move into 2024, I hope that this becomes a bit of a trend. We want devices with clear business use cases that make the job of an IT decision-maker that little bit easier.  

In recent years, prominent tech giants like Apple, Meta, Amazon, and Alibaba, have boldly ventured into the financial services sector. The move isn't surprising, considering these companies are already ecosystem players; their products are more than just hardware, seamlessly integrating technology into our daily lives, creating a holistic experience.

Apple's expansion into finance, including the introduction of high-yield savings accounts this year, has resulted in holdings of over $10 billion. This, alongside their existing services like Apple Pay, Apple Card, and Apple Pay Later, aligns with their strategy to diversify their financial services offerings and is a logical progression in a business sense.

But for consumers, the growing ventures into finance raise important questions about the wisdom of allowing Big Tech to control our financial services; there’s no doubt that we should be cautious in watching this unfold.

Tech-forward finance: What consumers want?

As consumer preferences evolve, a clear pattern has been emerging – a growing inclination towards convenience, consolidated services, and all-in-one super apps. 

This shift presents a substantial opportunity for big tech companies to integrate financial services into their expansive offerings, but this doesn’t mean they are trying to become banks themselves. Instead, big tech companies are forming partnerships with established financial institutions, like Goldman Sachs, to handle the products they are offering.

For example, regarding Apple’s savings accounts and card services, Goldman Sachs serves as the issuing bank, assessing the creditworthiness of applicants, determining credit limits and interest rates. It also manages customer service, billing disputes, fraud alerts, and payment assistance. Goldman Sachs provides the technological infrastructure, including the card network and payment processing, while ensuring Apple’s products comply with relevant laws and regulations.

Apple is then left to integrate the financial product into its existing portfolio, leveraging its tech to provide financial health tools, including spending summaries, payment suggestions, interest calculators, and monthly statements. Unique features, such as daily cash-back programs in the form of Apple Cash, are also provided by Apple, differentiating the offer from other financial services.

This approach efficiently transfers financial risks to third parties, whilst bolstering these all-encompassing ecosystems and fortifying customer loyalty through expanded offerings. Tech companies are diversifying their financial product offerings to include lending, asset management, and insurance services. We can anticipate not only a proliferation in the number of available products but also an expansion in the breadth and depth of their offerings.

These developments are prominently happening in the US; the European market presents its unique set of challenges due to its fragmentation. Financial services remain highly localised, and regulatory differences are prevalent across European countries. This stands in contrast to the United States, where financial regulations are primarily centralised within the federal government, and large banking institutions exert a significantly greater influence on the market.

Competition, Control, and Compliance

If Big Tech companies intend to expand their financial services in Europe, it would demand forming partnerships with numerous local banks and navigating these diverse regulatory environments, which companies like Apple do not want to do because it would create a far too complex and risk-adverse network.

They will, most likely, concentrate their collaborations with key strategic partners, potentially fostering monopolistic practices that will stifle healthy competition but produce better market conditions for them. Acting as gatekeepers, these tech giants dictate who can access these services and under what conditions, increasing the concentration of power within big tech.

More banks will undoubtedly begin finding themselves facing potential disruption as big tech firms progressively amass market dominance, causing mergers, acquisitions, or prompting a revaluation of established business models for the now ‘traditional’ banks.

Adding to these concerns is the issue of data privacy and security. With big tech companies already having access to vast amounts of user data, which is exponentially increased by a move into finance, the potential for data breaches and the misuse of sensitive financial information becomes undeniable. This not only poses a grave threat to individuals' financial well-being but also raises significant privacy concerns.

Such risk and upheaval ripples through the financial system, impacting its stability and resilience on a broader scale, and examining the economic implications of big tech’s dominance in financial services reveals a nuanced landscape. While it holds the promise of heightened efficiency and cost savings for consumers, it also introduces challenges in terms of oversight and regulation.

The sheer influence wielded by these tech giants frequently tests the limits of regulatory capacities; striking a delicate balance between effective oversight, innovation promotion, and adherence to financial regulations poses a complex challenge.

What consumers need to ask themselves

The European market, with its complex regulatory landscape, raises further queries:

• Are we willingly surrendering too much control to a select few companies? 
• Does the convenience of all-encompassing super apps come at the expense of healthy competition and diverse choices?
• In a world where data is currency, how do we reconcile the benefits of tech-forward finance with the potential risks to our privacy and financial well-being?

After all, who needs financial independence when you can have Big Tech manage your money and privacy all in one convenient package. It's not like they've ever mishandled data before, right?