What Jeff Bezos Told Us About Leaving Amazon

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1:51Carol Massar:Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus, global business, finance and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, it is one of the largest market cap companies. In fact, I think it's the fifth largest. We were talking about Amazon, founded by Jeff Bezos. He's still chair. It's now run by CEO Andy Jassy. He's now five years.

2:34Carol Massar:I can't believe that. Since he took over as the chief executive officer. It seems like just yesterday. It does. Oh, how time flies. It really does. Hey, and what's interesting is Jassy was, as Brad Stone writes in the cover story of Bloomberg Businessweek, he was once Jeff Bezos' deputy. and the head of Amazon's cloud computing arm, massive computing arm. Five years into his tenure as CEO, he's killing projects, cutting staff, pleasing Wall Street, and steering the everything store through its greatest challenge yet. His impact and role at Amazon, it's the cover story of the new issue of Bloomberg Businessweek.

3:05It's also the Bloomberg Big Take. For more, let's head to the Bloomberg News San Francisco Bureau. It's where we find Brad Stone. He's the editor of Bloomberg Businessweek magazine. You can read it online at Bloomberg.com on the Bloomberg and pick up on newsstands. Brad also the author of several books too about Amazon, including the everything store. Brad, so much coverage when it comes to Amazon, especially of, of, you know, the post Bezos era. The thing that I want to know is why Andy Jassy still drives himself to work every day in a 1998 Jeep Cherokee. Like seriously.

3:37Carol Massar:Is the Maserati at home? I mean, but also like even, I don't know, like I thought CEOs these days from a security perspective, like everything was so, uh, is so tight and secure. And like, you know, I know Bezos had a minivan for years, too. But anyway, that's something that was interesting. You know, they've got these corporate values that they promote internally and externally. And one of them is frugality. You know, the idea that you're saving every dollar for the customer. Walmart does the same thing. And I think the way, you know, Andy is such an Amazonian. It's where he's worked his whole life.

4:11He embodies the principles. And so I think it shows up in its personal choices, you know, which include, you know, he wore to the Businessweek photo shoot what he called his eight minute jacket. And it's a sport coat he literally bought in eight minutes in a scramble for a customer meeting once. And so it's just the kind of guy he is.

4:29Carol Massar:All right. So, you know, this company like no other. And Tim mentioned you wrote the Everything Store. You wrote Amazon Unbound. Why is now a really good time to be writing about Andy Jassy? Yeah. I mean, for tech companies right now, there is only one thing that matters, and that is where are they in this great AI race? And do they have the leading models? Do they have the right partners? What kind of money are they spending on data centers? And this is what investors are watching and with bated breath because the numbers are so large. And Amazon got a slow start. They had an opportunity to invest in Anthropic early, which they didn't.

5:09Some of their early models that they developed in-house haven't really been considered state-of-the-art. But I think it's become apparent over the past few months, maybe the past year, that Amazon's catching up in a number of ways. One, they've gone and Andy has formed partnerships with Anthropic, with OpenAI. OpenAI renegotiated its Microsoft deal essentially to avoid the exclusivity contract. So ChatGPT models could be on AWS, Amazon Web Services. Amazon redid Alexa. They call it Alexa Plus now. And they're making these chips, these Tranium chips that are in some ways competing with NVIDIA. And Amazon's offering is very Amazon-like.

5:53It's come to Amazon, you'll have a sort of menu of all the models, and you'll do it more cost-effectively than you might elsewhere. And frankly, AWS is now growing at a pace that it hasn't grown in a couple of years. The market has sort of turned. And so it just happened to be five years for Andy Jassy. But you can make an argument now that Amazon has caught up and it is one of the names that is leading us, whether we like it or not, into this new era. You know, as you write in the piece, Amazon invented this category with AWS and cloud computing. Andy Jassy and Jeff Bezos sort of conceived this together years ago.

6:26and he was the head of AWS before he became CEO of Amazon. How did what he saw happening at AWS as a result of AI inform the way that he made decisions about AI at Amazon? Well, I mean, I think they have a very good sense for, you know, what customers want, what the demand signals are. And no surprise, you know, I see this in my own, you know, kind of personal habits. I'm experimenting more with AI. I think everyone kind of feels it. And what Amazon saw probably earlier than most is that customer and corporate demand for AI services was maybe even higher than folks even anticipated. And so they're spending$200 billion in CapEx this year alone building data centers.

7:13We visited one of them in Mississippi. It's the lead to the piece outside Jackson, Mississippi. It'd be these massive buildings that are rising up from the from the you know, from the from the clay. And and basically, you know, one thing that Amazon can do better than almost everyone, because they are are so early to the cloud computing movement is stand up these data centers. And they're doing them all across the country. They're putting their own chips in them and they're promising that capacity to companies like Anthropic and OpenAI who can't even themselves get enough compute. So it does seem to me that Amazon's pretty well positioned right now, particularly for the bulk cases and AI adoption.

7:57Carol Massar:So does he have his L.A. raised girlfriend, now wife, to thank for him being CEO of Amazon? uh right um so i don't think so i mean we we talk about andy jassy's history um and it was almost a peculiar set of circumstances that got him to seattle in the first place uh you're you're right that you know his wife um wanted them to spend a couple of years earlier in their careers on the west coast and maybe seattle was a bit of a compromise um But he went early to Amazon. He joined in 1998. It was just a bookseller. Andy Jassy pioneered the, at the time it was CDs, so the music category on Amazon. He was early on the marketing team.

8:49And then he was the first shadow or sort of technical advisor to Jeff Bezos, which is basically the person that's going to follow the CEO around. And he was really became a kind of disciple. And then when they conceived Amazon Web Services together, he broke off and ran it with a lot of autonomy for 15 years. So, yeah, it's this extraordinary story, probably lots of good fortune that he was there at the beginning of this momentous Internet revolution. But it wasn't always totally without speed bumps. You point out in the piece that, you know, Bezos admonished him at one point publicly in a meeting.

9:24And, you know, he basically said, why should I ever listen to you about anything ever again if you get these numbers wrong? I mean, it was the kind of it was probably wasn't personal. It was the sort of comment that, you know, Jeff demanded excellence in meetings and had a brusque way, particularly early on of conveying that. But, you know, Jassy tells that story to illustrate to young people that like even and this resonated with me, that even if, you know, what is what are you what are you concerned about when you go into big meetings with your superiors? Well, you're concerned that, you know, you'll look foolish.

9:56And he said that there were instances when that happened. And the next day, everything was fine. People moved on. And so like he didn't end up worrying about that anymore. And it gave him new confidence.

10:08Carol Massar:I am curious, too, about the relationship between Jassy and Jeff Bezos. And I think increasingly we see people like Jeff Bezos or Tim Cook of Apple, like they are the ones who are dealing with Washington and all of those issues. And then there are other folks like really running the company. But but talk to us about I mean, is Jassy involved in the politics and so on and so forth? Because Amazon, of course, as you know, there is has its fans and it has its foes like of people who are really critical of the company. Yeah, I mean, I think Andy does have his own relationship, certainly with the president and the White House.

10:41But I want to make one distinction, which I thought about a little bit and wrote about in the Businessweek Daily newsletter this morning, which is we are surrounded by leaders in corporations and even political movements who are kind of, you know, inextricably linked to their organizations. And so you can't imagine, say, Tesla without Elon Musk or the MAGA movement without Trump. And, you know, Bezos really did architect an orderly and model CEO transition. And he did it five years ago. He's kind of stepped out of the way. He's executive chairman. He's very involved as an executive chairman. Definitely, probably helping Jassy to manage Washington.

11:30introducing and talking about evangelizing for new technologies. But, you know, you have to say, you have to give them credit, you know, in this day and age when the key man risk, to use the SEC term, is so high at companies. Like, he gave Jassy the reins and he really stepped out of the way. And I think it's worth saying at a time when, you know, you've got Palantir or Tesla or SpaceX going public, where you can't even imagine what happens to the market value of one of these companies if the key guy, the key figure is no longer there. And Brad, you make the point in the piece, too, that early on in the transition, he had to make some really tough choices as a result of some overhiring during the pandemic, a somewhat bloated corporate workforce that I think many would argue.

12:18How was he seen internally and externally as he was doing that? And what exactly did he have to do? Yeah, probably not very popular. He's laid off a good percentage of the company because, as you say, there was overhiring during the pandemic. Andy also felt like Amazon was too bureaucratic. He wanted to remove layers. and then of course somewhat spoken somewhat unspoken you've got ai making the company more efficient and you know when you you take opportunity away from people or you reduce the the ability to promote or people feel like promotions are closed off you know it creates conflict and more and you know and and like and this is not unique to amazon this is probably across business, certainly across Silicon Valley right now.

13:09So he made some unpopular choices. He also killed some prominent projects like the ghost store that just walk out technology and supermarkets, Amazon fresh grocery stores, different like, you know, robot delivery, drone, you know, delivery robot projects. But he's also placed bets elsewhere, like the satellites, They're creating a satellite internet service and they're going to be opening a new supermarket, new like super store in Chicago. Right. So, you know, I think there's a lot of people who have a lot of respect for them. And like with a lot of companies, it's not unanimous.

13:46Carol Massar:Great, great deep dive. As you know, this company like no other. Brad Stone, editor of Bloomberg Businessweek magazine. Brad, thank you. His story, it is the cover. Find it on the Bloomberg and online at Bloomberg.com. He's, of course, the author of many books, including two on Amazon. Stay with us. More from Bloomberg Business Week Daily coming up after this.

14:31Carol Massar:stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify, or anywhere you listen. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube. About a year ago, we were kind of coming off Trump's President Trump's Liberation Day higher on certain tariff environment. It was We were kind of up in the air about a lot of things. And at the time, we were forecasting, put out a story at Bloomberg just ahead of Memorial Day, that the price of a cookout was going up.

15:09Beef prices were an issue then, too. Yes, right?

15:12Carol Massar:Well, the story got into a lot of the issues were domestic ones that were impacting the prices of things. And then I think about this year, Tim, what's going on? Okay, U.S. war in Iran, higher energy prices, higher gas prices. Inflation prints just this week reminding us that inflation is outpacing wage growth. Not so good. Not so great. So what does it mean for our summer picnics as we get ready? Please, please to kick off summer. It's just around the corner. It felt like 45 this morning. That was the feel-like temperature. 51 degrees in New York. I still had layers. I hear it's going to be like 80 degrees on Sunday.

15:42Carol Massar:For more, let's head to Stu Leonard's Wines and Spirit store. It is in Norwalk, Connecticut. That's where we find Blake Leonard. She's the president of Stu Leonard's Wines and Spirits. She's also part of the next generation that will take over running the store founded by her grandfather. She will take the reins as president along with a cousin from her dad, Stu Leonard Jr. Keeping it in the family. I love that. You are a certified sommelier from the Culinary Institute in Napa. You've worked for many other families, too, in the wine business, including the well-known Gallows. Blake, welcome, welcome.

16:14Carol Massar:How are you? Hey, thank you so much for having me today. And, you know, since it's Friday, I wanted to start off just cheersing you with an Aperol Spritz right here. Oh, my God. I feel like she's seen Stu Leonard do this a few times on our show. Yeah. Yeah. Learn from the best. I love you. I love you, but I do resent that there wasn't one sent to us. That's all I'm going to say. I know. I'm just going to say. I think the interstate liquor laws, it's a big issue. Truly. That is true. I don't know. Okay. Well, maybe we can pick some up. But, you know, we're right here in spritz season now, so I'm excited.

16:48Carol Massar:Hey, talk to us, though, about the environment before we get into the summer season, what people are interested in terms of wines and spirits. But talk to us about the consumer, what you guys are seeing. Yeah, well, you know, I was the other day just visiting one of our wine suppliers and he was saying that it cost him over two thousand dollars more just to get a container of wine here into the U.S. right now. And that's, you know, just one part of the whole transportation piece, you know, for getting wine into our wine stores. Wow. So you couple that with with actually selling the wine in a time when we're hearing more and more about young people not drinking as much.

17:26this idea of dry January actually lasting the entire year. What does that mean for the overall business? Well, you also see customers here on the store, and I was just talking to a lady the other day who was just talking about how much more it costs her to fill up her huge van that she drives with all her kids in the back. So everyone here on the store floor is definitely feeling it. I think one good thing, and I was hearing all the stock prices before, but about being a family business is that we can work with our suppliers and hold those costs. In a lot of instances, we'll split that transportation cost with our suppliers so we can keep prices here on our store floor family-friendly.

18:07Carol Massar:And you guys have not yet seen price increases, my understanding is, due to fuel, correct? Yes, we have not. Here in the wine business, as you started off with the tariffs, that was big last year. And for this year, really no one wants to raise the price of wine right now. And I always look, this is a great new rosé that just came in. It's a new fresh vintage. But, you know, we're retailing this under$15. And if I were to go and sell it over$15, what happens to sales is they go down. So you really have to be price sensitive with those barriers there. And we look at it as hopefully a temporary thing and, you know, trying to look at the longer picture.

18:46Is the idea on it with a product like that? And if, you know, if I'm thinking about margins correctly, that you take a little bit of a hit there, but you get people in the store to buy that. And then they buy other things that don't have as big that have bigger margins. Yes. Well, and one of the things that I love doing is I'm like a little, you know, wine detective out there. But I love going every year we go to a wine show, either in Paris or in Italy. And we get to meet firsthand with a lot of these multigenerational families who are making unbelievable wine. And we get to bring them back and sell them in our stores.

19:18And really, they're wines that over-deliver for the price. And we often say they taste like they're twice the price. So really trying to bring not only the price point, but also the story back for our customers. Because we think that now more than ever, that's what customers want to hear about.

19:34Carol Massar:I'm always amazed when you're over in Europe or Paris and you just order, I don't know, just a little wine, nothing big. And it's just great. Like, I feel like over the years and, you know, this this industry, like it just feels like, you know, we keep getting told you don't have to spend a lot of money to get a great bottle of wine. Yeah, no, you don't. And, you know, right here, this is this. This is a Corsican rosé that I have. And this is also one of our bestsellers. It's a Provence rosé under fifteen dollars, a female winemaker. She won the top 100 winemaker, you know, one of the top 100 winemakers in the world.

20:11She was awarded a couple of years ago. So there's great value out there. You do have to spend time looking for it. But that's what we really strive to do for our customers here on the store floor, as well as educate them. So let's talk a little bit about the next generation of Stu Leonard's and sort of the timeline for you and your cousin taking over. And also, I'm curious about with a background in wine and spirits, what you can then do in your approach to the grocery business, a historically low margin business, a very challenging business that, you know, you have to work with the ups and downs of the economy and the macroeconomic environment.

20:46What is your plan for Stu Leonard's when you take it over? You know, yesterday, all of my cousins and my dad, you know, it was work, but we got to spend the day all together in the city listening to other family businesses talk. And it was a really awesome day. But one of the biggest takeaways I had listening to Jim Perdue speak and we got to meet him afterwards and hearing Enterprise as well and Panda Express. They all stick to their core values. So no matter what happens is sticking to their core values. When I look back at our business today, you know, I grew up drinking milk from stews and my kids today.

21:22They're also drinking milk from stews, but it's organic. And so, you know, if we had 20 years ago tried selling organic milk, it would have been way too expensive to really for our customers at that time. But we've evolved. And so it's kind of just a slow evolution over time. And that's, you know, one of the things that that always sticks out to me is that my kids are drinking organical milk now.

21:44Carol Massar:Blake, I just want to mention we have a headline crossing from Reuters. SpaceX picks the NASDAQ as its listing venue for its massive upcoming IPO. On that, do you guys ever think about going public? We've definitely had offers, and we have offers to either go into partnerships or to be purchased. And it's always something we think about because in my generation, it went from four in my dad's generation now to over 13 of us. And now in the fourth generation, there's over 22 great grandkids. So it's definitely something we always think about. But really what we want and my cousins and I all just met recently to talk about this is we really want to keep this a family business and want to continue.

22:29You know, the decisions we get to make every day are really, you know, ones that we don't have to rely on anyone else for that.