Amazon cloud unit speeds up revenue growth as clients adopt AI services

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Amazon said Thursday that its cloud division grew revenue 13% year over year in the fourth quarter, exactly in line with analysts' projections. The company pointed to growing traction in cloud services for artificial intelligence.

Many large technology companies have worked quickly to release new products or update existing ones in order to capitalize on corporate interest in replicating generative AI capabilities after startup OpenAI introduced the ChatGPT chatbot in late 2023. AWS, for its part, introduced the Q chatbot for developers and non-technical corporate workers, along with the Trainium2 chip for training artificial intelligence models, in the fourth quarter.

Amazon Web Services posted $24.20 billion in revenue in the quarter. Analysts polled by StreetAccount had been looking for $24.20 billion. Growth sped up from 12% in the third quarter.

"We expect the acceleration to continue in 2024," Brian Olsavsky," Amazon's finance chief, said on a call with reporters.

AWS' top U.S. challengers continue to grow faster. Revenue from Azure and other cloud services at Microsoft rose 30%, and Alphabet's Google Cloud revenue, which includes Google Workspace productivity software subscriptions, increased by about 26%.

The Amazon cloud group turned over $7.17 billion in operating income. That's up around 38% and above the StreetAccount consensus of $6.93 billion. That means AWS delivered 54% of Amazon's $13.21 billion in total operating income.

AWS now represents 14% of Amazon's overall revenue.

At the AWS Reinvent conference in Las Vegas in November, Adam Selipsky, Amazon's cloud leader since 2021, welcomed Nvidia CEO Jensen Huang to the stage to announce a broadening partnership, which included a cluster of Nvidia graphics processing units that Nvidia and cloud clients can use. Huang has also kept GPUs flowing to Google and Microsoft, among other cloud infrastructure providers.

In a statement, Amazon highlighted AWS AI wins during the quarter from the likes of Accor S.A., Mitsubishi UFJ Financial Group, Salesforce and The Very Group.

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