Amazon Web Services is doing better than expected with a more profitable quarter than the analysts had predicted. The segment’s revenue was also in line. AWS expanded its Nvidia relationship this quarter and introduced an artificial intelligence training chip too.
On Thursday, Amazon said that its cloud division grew revenue by 13% year over year in the fourth quarter which was exactly in line with the analysts’ projections. There was also focus shed on the growing traction in cloud services for artificial intelligence.
After the introduction of ChatGPT by OpenAI in late 2023 where a lot of generative AI capabilities was highlighted there was a lot of corporate interest in replicating this capability. Many companies have quickly worked on creating technologies that do so. Amazon Web Services introduced the Q Chatbot for developers and nontechnical corporate workers. It also released the Trainium2 Chip for training AI models – all this in the fourth quarter.
AWS went on to post a $24.20 billion in revenue in this quarter. Growth had 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.
In the fourth quarter revenue from Azure and other cloud services at Microsoft rose 30% and Alphabet’s Google Cloud revenue including Google Workspace productivity subscriptions increased by 26%.
“While cost optimization continued to attenuate, larger new deals also accelerated,” Amazon CEO Andy Jassy, the former head of AWS, said on the company’s earnings call. He said clients are “renewing at larger commitments over longer periods, and migrations are growing.”
Additionally this quarter they also worked on theri relationship with Nvidia. At the AWS Reinvent conference in las Vegas in Novemeber, Adam Selispky, the Amazon cloud leader since 2021, welcomed Nvidia CEO Jensen Huang onstage to announce a broadening partnership. This would come to include a cluster of Nvidia graphics processing units that cloud clients can use. Huang also kept the GPUs flowing to Google and Microsoft.
