Top 10 Biggest AWS News Stories Of 2023: AI, Layoffs And Slowing Sales

From generative AI and new product launches to AWS layoffs and a slowdown in sales, here are the 10 most important AWS news stories of 2023.

The Amazon Web Services of 2023 looks very different from the AWS of 2022. From the $92 billion company’s ability to pivot entirely towards artificial intelligence this year to layoffs and a sales growth slowdown, AWS’ goals and strategy shifted in 2023.

“GenAI is the next step in artificial intelligence,” said AWS CEO Adam Selipsky on stage in front of tens of thousands of AWS re:Invent 2023 attendees last month. “And it’s going to reinvent every application that we interact with at work and at home.”

The Seattle-based worldwide leader in cloud computing placed all of its chips this year on generative AI, showing customers, partners and investors just how fast Amazon’s technology arm could innovate. From Amazon Bedrock and new AI processors to its $4 billion investment in startup Anthropic, AWS made headlines throughout 2023 in a move to become a world leader in AI.

[Related: AWS re:Invent 2023 Wrap-up: 15 Huge Products And Partner Launches]

The biggest AWS news stories of 2023 revolved around generative AI innovation, employee layoffs, cloud sales, the AWS Marketplace and massive investments in artificial intelligence across the board.

CRN breaks down the ten most important AWS stories this year that you need to know about.

No. 10: Amazon 18,000 Layoffs And AWS Cuts

Many might forget that in early 2023 the IT industry was bombarded by a wave of layoffs, from startups to the largest IT companies in the world including Microsoft, Google and Amazon.

AWS parent company Amazon announced in January it would be laying off more than 18,000 employees in 2023. which caused some concern about the impact it would have on AWS. CRN discovered that the 18,000 Amazon layoff round initially didn’t impact AWS.

However, in March, Amazon unveiled a new round of 9,000 cuts that would see some AWS employees laid off. The company told CRN at the time that this layoff round would impact a “small, single-digit percentage” of AWS staff. Although AWS doesn’t disclose how many people it employs globally, the layoffs meant at least hundreds, possibly a few thousand AWS employees were cut.

CRN reviewed dozens of LinkedIn posts from AWS employees who were laid off, many of which appeared to be relatively new employees—having joined the company within the past few years.

The Takeaway: The layoffs at AWS this year could have been the largest layoff round since the cloud company was formed in 2006. There appears to have been no major disruption to AWS’ business in 2023, while Amazon leaders like CEO Andy Jassy have significantly touted their commitment and investment to AWS throughout the year.

Click through to read the nine other biggest AWS stories of 2023.

No. 9: AWS Is Still The No. 1 Worldwide Cloud Champion

Regardless of layoffs and slower sales growth this year, it is still important to note that Amazon Web Services remained the largest cloud computing company on Earth in 2023.

The company currently has a $92.4 billion run rate after generating $23.1 billion in revenue during the third quarter of 2023. AWS continues to pour money into building new and expanding its data center infrastructure across the globe, which powers its services and cloud computing capabilities.

As of Q3 2023, AWS owns approximately a 32 percent share of the worldwide cloud infrastructure services market, according to data from Synergy Research Group. AWS global cloud market share numbers have hovered between 32 and 34 percent over the past several years.

The Takeaway: Even though Microsoft is closing the gap at No. 2 with 23 percent global market share in Q3 2023, AWS still runs the most dominant cloud computing platform and company in the world. With billions being invested in order to reach new customers in new regions across the world—as well as the company’s R&D strategy around AI—AWS will likely still be the worldwide cloud market share leader next year.

No. 8: AWS Biggest Product Launch Of 2023: Amazon Bedrock

As OpenAI’s ChatGPT generative AI technology sent shockwaves across the industry in late 2022 and reopened the discussion on responsible AI, AWS began creating its own GenAI technology.

AWS debuted Amazon Bedrock in April, dubbing the platform to be the easiest way for businesses to build and scale generative AI applications with foundation models via a single API. Bedrock offers a choice of foundation models from leading AI companies like Anthropic, Cohere and Meta, as well as Amazon, along with a broad set of privacy and security capabilities for developers to build GenAI applications. Customers can customize their GenAI solutions on Bedrock using their data alongside techniques like fine-tuning and building agents that execute tasks.

“As generative AI gains momentum across industries, customers ask us how they can embrace this technology without risking data privacy or IP,” said AWS’ CEO Adam Selipsky earlier this year. “We’re addressing that challenge with Amazon Bedrock, which ensures customer data is encrypted and not used for training models.”

The Takeaway: AWS was in dire need of a flagship generative AI offering in 2023. Amazon Bedrock was their answer with a differentiated focus on data privacy and unique AI services, which will undoubtedly be revamped in 2024 with enhanced capabilities.

No. 7: AWS Doubles Down In Partner SCA And New AI Solutions For Partners

As AWS pivoted to generative AI in 2023, the company made sure it was in lockstep with its partners as proved by the slew of new strategic collaboration agreements (SCAs) with channel partners around GenAI.

These SCAs provide partners with resources and financial incentives to drive new GenAI customer wins, create new AI offers, and boost sales and cloud commitment spending – all with the long-term goal of helping businesses transform their data and AI posture.

For example, AWS partner Quantiphi signed an AWS SCA to drive customer adoption as it launched several new GenAI solutions leveraging AWS applications such as Amazon Bedrock and Amazon SageMaker.

Another example is AWS partner Innovative Solutions, which was able to hired hundreds of new employees thanks to signing an SCA with AWS aimed at winning new SMB customers. Last month Innovative was able to launch a new managed service on top of AWS Bedrock that securely manages customer data to enable GenAI-based outcomes.

The Takeaway: These GenAI-focused SCAs with partners are critical to AWS’ success in the artificial intelligence market. AWS, like its competitors, cannot win the GenAI arms race without enabling and working alongside its channel partners. If 2023 is any indication, AWS has a bright future in the GenAI world if it continues to invest and enable its partner ecosystem.

No. 6: The AWS Marketplace Is The Future

AWS isn’t shy about how it wants customers to buy and sell their products and offerings in 2024 and beyond: Through the AWS Marketplace.

This year the company was more vocal about that strategy than ever before as AWS is striving to make it possible for partners to implement their entire portfolio of services and private offerings on its online marketplace.

“We want to reach more customers through the AWS Marketplace,” Ruba Borno, vice president and head of worldwide channels and alliances for AWS told CRN recently. “We want to make it easier for them to find industry solutions and use cases that meet their specific needs with our partners. I want partners to make sure that they are working with AWS in a co-sell fashion, especially through the AWS Marketplace, because we’re continuing to invest in that to help them grow and reach more customers.”

In fact, the AWS Marketplace currently has over 15,000 transactable listings from more than 3,500 ISVs, 300 data providers and 1,300 AWS channel partners. There are now more than 330,000 active AWS Marketplace subscribers across 30 regions.

A 2023 Forrester study on the AWS Marketplace found that partners leveraging the online marketplace are seeing a more than 200 percent return on investment (ROI), deal closing at a 50 percent faster rate, and an increase of deal sizes by 4X to 5X. Additionally, AWS said its Marketplace team has doubled the number of launches in 2023 compared to 2022.

“We’re continuing to see a flywheel effect: more customers and more partners that are on the AWS Marketplace,” said Borno.

The Takeaway: The cloud giant constantly added new features, integrations and APIs into the Marketplace this year. Borno’s quote to CRN sums it up best: “We’re going to continue to invest in this self-service capability to help customers find the right partner on their own,” she said. “Next year, we’re going to continue to see improvements.”

No. 5: AI Innovation Engine On Fire

The rapid pace of AI launches from AWS in 2023 was mind-blowing. At every single major AWS event this year, the company unveiled a slew of new artificial intelligence or GenAI-focused launches—from AI chips and cybersecurity to collaboration assistants.

One of the biggest AI unveilings recently was Amazon Q, the company’s new generative AI-powered assistant designer for workers—not consumers—with the ability to have conversations, solve problems, generate content, gain insight and take action by connecting to their company’s information, code, data and enterprise systems.

On the AI security front, AWS launched Guardrails for Amazon Bedrock in a move to implement safeguards customized to a business’ application requirements. AWS also launched a new Trn1n instance that runs on AWS’ custom Trainium chips and offers massive networking capability, which is key for training AI models quickly and in a cost-efficient manner.

Besides brand new AI launches, AWS also injected AI capabilities this year into some of its most popular products including Amazon Connect, Amazon Redshift Serverless and SafeMaker, to name a few.

The Takeaway: The long list of new AI offerings AWS launched this year is nearly unprecedented and enabled the company to join the AI leadership debate. With bold AI ambitions like Amazon Olympus already in the works for next year, its safe to say that AWS had a successful AI innovation year in 2023 with a bright future ahead.

No. 4: AWS Chips And Nvidia Partnership

AWS doubled down this year in creating new chips and technology in order to provide an end-to-end AI portfolio.

AWS launched a new generation of high-performance machine learning Trainium chips specifically designed to reduce the time and cost of training generative AI models. The new Trainium2 chips deliver up to 4X faster training than first-generation Trainium chips and will be able to be deployed in EC2 UltraClusters of up to 100,000 chips, making it possible to train foundation models and large language models (LLMs) in a fraction of the time while improving energy efficiency up to 2X.

AWS also launched a new EC2 Inf2 instance powered by AWS’ own Inferentia2 chips, which aims to lower the cost of running generative AI workloads. To take AI to the next level, AWS unveiled last month its new Graviton4 chip, dubbing it the most energy-efficient chip AWS has ever built.

In addition to in-house CPU innovation, AWS vastly enhanced its partnership with AI chip superstar Nvidia to bring together the best of AWS and Nvidia technologies—from Nvidia’s newest multi-node systems featuring next-generation GPUs, CPUs and AI software, to AWS Nitro System advanced virtualization and security—with the goal of building GenAI applications and training AI foundation models.

AWS CEO Selipsky and Nvidia CEO Jensen Huang shared the stage on several occasions in 2023 to tout their companies’ dedication to their joint AI initiatives.

Onstage alongside Selipsky at AWS re:Invent last month, Huang said, “Driven by a common mission to deliver cost-effective state-of-the-art generative AI to every customer, Nvidia and AWS are collaborating across the entire computing stack, spanning AI infrastructure, acceleration libraries, foundation models, to generative AI services.”

The Takeaway: AWS dove deeper into the chip industry than ever before in 2023 with the purpose of having end-to-end control of the hardware and software that power AI. The tech giant spread its wings around AI processing technology this year in a bold move that will pay off for years to come.

No. 3: Slowdown In Sales Growth This Year

For the past several years, AWS typically reported year-over-year sales growth in the range of 30 to 40 percent or more. The company’s Q1 2022 sales, for example, grew 37 percent year over year. However, AWS’ historically high quarterly growth numbers didn’t happen this year.

In Q1 2023, AWS revenue increased 16 percent year over year to $21.4 billion. For Q2 2023, AWS sales growth was just 12 percent year over year with sales of $22.1 billion. And in Q3 2023, AWS revenue increased just 12 percent again year over year on $23.1 billion in revenue.

AWS’ two biggest cloud and AI rivals—Microsoft and Google—witnessed greater sales growth this year than AWS. For example, Google Cloud recorded year-over-year sales growth of 22 percent in Q3 2023 on revenue of $8.4 billion. However, Google’s $8.4 billion was far less than AWS’ $21.4 billion in the quarter.

The Takeaway: There is no reason for AWS to panic just yet. Its investments in AI and other cloud R&D this year should pave the way for a more successful 2024. However, if AWS revenue growth continues to be in the low teens throughout next year, it will show that Google and Microsoft are likely winning customer mindshare.

No. 2: AWS Picks AI Startup Anthropic For Its Future

The hottest startups in the world this year were artificial intelligence companies. While Microsoft placed its AI startup bet on ChatGPT creator OpenAI, Amazon this year firmly placed its bet on Silicon Valley-based Anthropic as the startup partner to tighten AWS’ grip in the GenAI market.

In one of the largest investments in its history, Amazon committed this year to investing up to a whopping $4 billion in Anthropic, while also buying a minority ownership position in the company. The unicorn startup reportedly has an evaluation now north of $20 billion.

This bet was highly strategic to Amazon and to AWS’ future.

With the multi-billion-dollar alliance, Anthropic will use AWS chips to build, train and deploy its future AI foundation models on. The two companies will also collaborate in R&D to develop future AWS Trainium and Inferentia chips.

Additionally, AWS will become Anthropic’s primary cloud provider for AI workloads, while Anthropic will provide AWS customers and partners with early access to features for model customization and AI fine-tuning capabilities.

“We have tremendous respect for Anthropic’s team and foundation models, and believe we can help improve many customer experiences, short- and long-term, through our deeper collaboration,” said Amazon CEO Andy Jassy in September.

The Takeaway: With AWS having one of the most sought-after AI companies in its corner paves the way for massive AI innovation. Anthropic and AWS will no doubt develop GenAI solutions together that will likely shape, or potentially reshape, the AI landscape in 2024.

No. 1: AWS Pivots In 2023 And Succeeds In Becoming A Generative AI Market Leader

Not many people were talking about AI at the start of 2022. Generative AI wasn’t even a common term used in the IT industry.

As 2023 began, not many people would have predicted how quickly one of the largest companies in the world—$572 billion Amazon—would pivot its entire technology strategy towards artificial intelligence with AWS leading the way. Besides all the new GenAI products and massive AI investments CRN already discussed in this story, it is key to note that AWS itself is striving to now become an AI-focused company – which wasn’t necessarily the case in 2022.

This year AWS poured $100 million into creating a new AWS Generative AI Innovation Center to help customers successfully build and deploy custom generative AI solutions.

To drive customer demand for GenAI, AWS created a slew of in-person and online generative AI courses taught by AWS AI experts, while also hosting dozens of AI events to help IT leaders get a grasp of AI’s business potential.

To push startups to accelerate GenAI innovation that focused on AWS, the company launched a new AWS Generative AI Accelerator startup program where startups pitch their demos to venture capitalists in the AWS network.

On the AI security front, AWS emphasized multiple times this year that it plans to become a global leader in responsible AI as seen in launches like Guardrails for Amazon Bedrock for GenAI safeguards.

“GenAI is the next step in artificial intelligence,” said AWS CEO Selipsky (pictured). “And it’s going to reinvent every application that we interact with at work and at home.”

The Takeaway: Overall in 2023, AWS put a full-court press on the newly created generative AI market by: Launching a new GenAI portfolio of products and services; winning over one of the hottest AI startups in the world in Anthropic; hosting events to fuel customer demand; training countless AWS partners to sell GenAI; and almost instantly turned all of its marketing, sales and events efforts towards generative AI. If AWS was able to do all of in 2023, imagine what the company has in store for 2024.