Andrew Jassy: Well, I’ll start on the North America retail piece, which is again, I’ll just remind that we’re not going to expand the number of fresh stores in a very significant way until we believe we have something that is resonant with customers and that we’re going to like the return on invested capital. So that to me, I’m hopeful we’re going to find that but we won’t until we do. I think as it relates to same-day facilities, we actually think that’s going to be very positive for the business. It is — as I mentioned in my opening remarks, it is one of our most cost-effective mechanisms and fulfillment vehicles with respect not just to getting it there to customers quickly, but being fast, in part because those facilities, they’re smaller facilities.
They’re big enough obviously to hold, in steady state, 100,000 SKUs and then also to have all of our nearby fulfillment centers be able to inject lots of different selection in there, so we can cover several million SKUs in that same-day or 1-day fashion. But they’re smaller — in general, they’re smaller facilities with less conveyance and with more streamlined pick directly to pack and to get out to the dock to ship. And so they’re just much more efficient as well. So we actually think that the expansion of those is going to not just help with speed and with demand, but we’re going to also like the cost structure associated with that. And I continue to believe what I said last quarter, Brian, which is I do believe that we’ll get back to margins like what we had pre COVID.
And I don’t think that’s the end of what’s possible for us there. On the AI question, what I would tell you, every single one of our businesses inside of Amazon, every single one has multiple generative AI initiatives going right now. And they range from things that help us be more cost effective and streamlined in how we run operations in various businesses to the absolute heart of every customer experience in which we offer. And so it’s true in our stores business. It’s true in our AWS business. It’s true in our advertising business. It’s true in all our devices, and you can just imagine what we’re working on with respect to Alexa there. It’s true in our entertainment businesses, every single one. It is going to be at the heart of what we do.
It’s a significant investment and focus for us.
Operator: Our final question comes from the line of Doug Anmuth with JPMorgan.
Douglas Anmuth: Just on AWS, as you lap optimizations and the macro-driven slowdown and you start to get the new workload deployment, how do you think about what normalized growth could look like for AWS in a better macro environment? And then secondly, helpful to get the just over $50 billion CapEx number for this year. Just curious how generative AI changes or could change your CapEx trajectory going forward.
Andrew Jassy: Well, it’s a good question. And I would say that while I expect there will continue to be cost optimization, I think that the balance of cost optimizations to actually new workloads and new migrations as we saw a shift in that in Q2, I expect that we’ll continue to see that shift over time. And as I said, I mean, everybody has to make their own conclusions on what percentage revenue growth they believe it means. But to grow double digits on an $88 billion revenue run rate business, when you’re seeing that amount of cost optimization as every company in the world is trying to save as much money as they can in the last year, to still grow double digits on a base that size means that we’re acquiring a lot of new customers and a lot of new workloads.
