Amazon Web Services (AWS) has reported a 19 percent increase in sales to $27.5 billion during the third-quarter of 2024 as it enhanced its focus on AI business.
AWS competes with Microsoft’s Azure and Alphabet’s Google cloud, which both reported increases in quarterly cloud revenue this week. Microsoft’s Azure business grew 33 percent. AI revenue contribution to Microsoft’s Azure business was 12 points.
Google Cloud
In Q3 2024, Google Cloud said its revenues increased 35 percent to $11.4 billion led by accelerated growth in Google Cloud Platform (GCP) across AI Infrastructure, Generative AI Solutions, and core GCP products, Sundar Pichai, CEO Alphabet and Google, said during the recent analyst call.
Microsoft Cloud
Microsoft’s Intelligent Cloud segment revenue was $24.1 billion (up 20 percent) in Q3 2024. The total size of the Microsoft Cloud business has surpassed $38.9 billion in revenue (up 22 percent) in Q3 2024, Microsoft CEO Satya Nadella said during the recent analyst call.
AI powers AWS
AI has become a driving force behind Amazon Web Services (AWS)’s growth, contributing significantly to its expansion in cloud and infrastructure services and positioning AWS as a leader in AI capabilities.
Key partnerships and advancements, such as the collaboration with NVIDIA on Project Ceiba, showcase AWS’s robust infrastructure and security, positioning it as the chosen platform for NVIDIA’s R&D supercomputer. This reflects AWS’s strategic advantage in performance, operational excellence, and security, all of which are essential for AI workloads.
AWS has built three strategic layers for AI offerings, each representing substantial growth potential. At the foundational level, AWS provides high-performance hardware, such as NVIDIA’s H200 GPUs in its EC2 P5 instances, alongside innovations in networking like the Elastic Fabric Adapter and Nitro.
To address Cloud customer demand for cost-effective solutions at scale, AWS has also developed its own silicon, including Trainium for training and Inferentia for inference, offering competitive price performance as customers’ AI needs scale.
Additionally, AWS has doubled its machine learning and generative AI feature releases in the past 18 months compared to other major cloud providers. This focus on rapid AI advancements has allowed AWS to support large-scale AI efforts by companies across industries, from banking and automotive to telecommunications. By enabling the migration from on-premises systems to the cloud, AWS empowers these companies to innovate faster, reduce costs, and harness the power of generative AI more effectively.
The growth of AWS’s AI business has been substantial, with a triple-digit year-over-year increase, reaching a multibillion-dollar revenue run rate and expanding three times faster than AWS’s original growth trajectory.
This has positively impacted AWS’s financial performance, driving a rise in annualized revenue run rate to $110 billion and boosting operating income. With planned capital investments of $75 billion in 2024 to support AI demand, AWS aims to remain at the forefront of AI and cloud infrastructure innovation, underscoring the critical role AI will continue to play in AWS’s ongoing expansion.
Baburajan Kizhakedath
