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Cloud giants report sales boost amid AI interest rebound

Written by Thu 2 May 2024

Alphabet, Amazon, and Microsoft reported better than expected sales at their cloud computing units, as artificial intelligence (AI) interest pushes a rebound in corporate user spending.

Reuters reported big cloud customers have begun spending again after pausing spending to cut costs. 

Amazon’s cloud computing division, Amazon Web Services (AWS), saw a 17% growth in the January to March period, hitting a £79.9 billion ($100 billion) annual run rate for the first time. This exceeded Wall Street’s 15% growth estimate.

Microsoft’s Azure experienced strong performance, surpassing expectations with a growth rate of 31% in Q1 of the year. Meanwhile, Google Cloud also demonstrated robust growth, exceeding forecasts with a 28% increase during the same period.

Lack of Cloud Spending Attributed to Slowing Growth 

During the COVID-19 pandemic, businesses experienced growth rates reaching 60% as businesses transitioned their businesses online. Organisations have since had to realign expectations as users have slowed on spending in challenging business environments.

The industry has now been leading in integrating AI into its products and services, and customers have been quickly purchasing the new AI-driven features.

“The number of Azure AI customers continues to grow and average spend continues to increase,” said Satya Nadella, CEO at Microsoft.

Azure growth was boosted by 7 percentage points due to its AI services. This is an increase from the 6 percentage points contribution in the previous quarter from October to December.

CEO of Alphabet, Sundar Pichai, said more than 60% of funded generative AI startups and almost 90% of generative AI unicorns were using Google Cloud.

In March, Amazon AWS and NVIDIA announced the new NVIDIA Blackwell GPU platform is coming to AWS. AWS is expanding its offerings with the inclusion of the NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs, further solidifying their ongoing partnership. 

This collaboration aims to provide customers with enhanced infrastructure, software, and services, facilitating the adoption of advanced generative artificial intelligence (AI) capabilities in a secure environment.

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Written by Thu 2 May 2024

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