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0 pointstyps1y ago0 comments

This is the modern version of 2010's "Amazon makes no money in retail"

0 comments

But isn't it the case that the cash cow for Amazon is actually AWS? That is, without AWS would we consider Amazon to be the success we see it as today?

machomaster1y ago

Yes we would.

stephenhuey1y ago

Keep in mind that while the store brings in a majority of revenue, it provides less than 20% of operating income. A majority of operating income comes from AWS (which provides less than 20% of revenue).

https://www.fool.com/investing/2024/01/10/amazon-e-commerce-...

machomaster1y ago

Forget about AWS and simply compare Amazon with other offline/online/mixed stores.

"In 2023, Amazon accounted for 37.6% of all e-commerce sales in America, which was light-years ahead of second-place Walmart at 6.3%."

Amazon is highly successful even without AWS.

sofixa1y ago

Amazon weren't making money because they were expanding rapidly and had a lot of capex.

OpenAI don't make money because they're losing money on inference. If you remove their capex - training costs, which you can't because they have to remain competitive, they'd still be losing money.

orwin1y ago

I see your overall point, i think it is the wrong comp. It compare more to SAP or Atlassian.

eitally1y ago

I'm curious how you put OpenAI, SAP & Atlassian all in the same category. Do you mind explaining your thinking?

orwin1y ago

It's a comparison, not a same category.

Leaders in their market, at first because of a small moat and large advance, then the advance shrink but the brand will stay first for at least a decade due to brand recognition.

The Amazon comp works less, unless openAI start to suddenly build the sell their own chips.

j / k navigate · click thread line to collapse

0 comments

zoogeny1y ago

But isn't it the case that the cash cow for Amazon is actually AWS? That is, without AWS would we consider Amazon to be the success we see it as today?

machomaster1y ago

Yes we would.

stephenhuey1y ago

https://www.fool.com/investing/2024/01/10/amazon-e-commerce-...

machomaster1y ago

Forget about AWS and simply compare Amazon with other offline/online/mixed stores.

"In 2023, Amazon accounted for 37.6% of all e-commerce sales in America, which was light-years ahead of second-place Walmart at 6.3%."

Amazon is highly successful even without AWS.

sofixa1y ago

Amazon weren't making money because they were expanding rapidly and had a lot of capex.

OpenAI don't make money because they're losing money on inference. If you remove their capex - training costs, which you can't because they have to remain competitive, they'd still be losing money.

orwin1y ago

I see your overall point, i think it is the wrong comp. It compare more to SAP or Atlassian.

eitally1y ago

I'm curious how you put OpenAI, SAP & Atlassian all in the same category. Do you mind explaining your thinking?

orwin1y ago

It's a comparison, not a same category.

Leaders in their market, at first because of a small moat and large advance, then the advance shrink but the brand will stay first for at least a decade due to brand recognition.

The Amazon comp works less, unless openAI start to suddenly build the sell their own chips.

j / k navigate · click thread line to collapse