The AI boom is creating a great need for computing power from the cloud – and Amazon is there with the servers from its AWS division. At the same time, billions must be invested in new capacities.
The retail business and cloud services gave Amazon a strong increase in sales in the last quarter. Revenues rose year-on-year by 13 percent to $143.3 billion (134.3 billion euros), as the world’s largest online retailer announced after the US stock market closed. Amazon thus exceeded analysts’ expectations.
In the AWS cloud division, sales rose by 17 percent to $25 billion. In this business, Amazon also benefits from the increased need for computing power for applications with artificial intelligence, said CEO Andy Jassy in a conference call with analysts.
AI: Amazon catching up
AWS is relying on customers to use the group’s services not only to train AI applications, but also to create new content, he emphasized. And that is potentially the bigger deal, since AI only needs to be retrained from time to time – but is increasingly being used for generation.
Microsoft and Google are also benefiting from the AI boom in their cloud divisions. Microsoft also entered the AI business early on through a pact with the ChatGPT developer company OpenAI and integrated the technology behind the chatbot into its products.
Amazon is catching up in generative AI and has joined OpenAI competitor Anthropic, among others. At the same time, the group will invest billions in expanding the cloud infrastructure for AI applications, said CFO Brian Olsavsky. Before the AI tailwind, growth in Amazon’s cloud division had weakened.
Amazon shares temporarily rise
Amazon shares temporarily rose by more than three percent in after-hours trading, but then the gain slowed to 1.26 percent. Amazon predicted sales of between $144 billion and $149 billion for the current quarter. That is below the forecast of analysts, who had expected an average of around $150 billion.
In North America, Amazon’s revenue grew by twelve percent to $86.3 billion, while international sales increased by ten percent to almost $32 billion. Advertising revenue increased by 24 percent to almost twelve billion dollars after Amazon introduced a tariff with advertising in its video streaming service.
The bottom line was that consolidated profit rose to $10.4 billion from $3.2 billion in the same quarter of the previous year. AWS contributed an operating profit of $9.4 billion – a year earlier it was $5.1 billion.
Source: Stern
