Amazon’s AI Thesis: Commoditize the Model, Own the Infrastructure

Amazon’s AI reorg is about executing a different thesis: AI advantage will come from hardware-software co-design at massive scale, not research breakthroughs alone.

The Formula

Trainium trains – Nova serves – AWS distributes – Customers save 30-50% – Volume grows – Margins improve – Reinvest in next-gen silicon

Each step reinforces the next. The flywheel accelerates.

The Historical Playbook

Books: Commoditized content, monetized distribution
Computing: Commoditized servers, monetized cloud
AI: Commoditizing models, monetizing infrastructure

The Risk

If Amazon is right – models become commodities, infrastructure differentiates – this reorg wins.

If wrong – frontier capabilities remain decisive – they’re building an expensive also-ran.

DeSantis’s job is proving the former. His track record suggests he might.

Key Takeaway

As the AI Value Chain evolves, owning infrastructure may matter more than owning models. History suggests Amazon is right.

Source: Amazon’s AI Superstructure on The Business Engineer