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Amazon, Microsoft, Google Expect Future Cloud Gains From AI Moves

The Big 3 public cloud providers see gains and prospects of future growth thanks in no small part to demand for AI.

The Big Three public cloud providers are continuing to grow despite economic challenges, with Amazon Web Services (AWS), Microsoft Azure, and Google Cloud all reporting financial earnings this week that showed revenue growth.

Both Microsoft and Google parent company Alphabet reported earnings on April 25. Microsoft reported cloud revenue of $28 billion in quarterly revenue, up 22% year over year. Alphabet reported Google Cloud revenue was $7.5 billion for the quarter, up 28%. Amazon reported its earnings on April 27, with AWS cloud net sales coming in at $21.4 billion in the first quarter, up 16% year-over-year.

Synergy Research Groupchart of cloud infrastructure services market

A prevailing theme across the Big Three public cloud providers is that future growth is very likely to come from growing demand for artificial intelligence (AI)-based services that each of the vendors offers on their cloud platforms.

Microsoft Banking on Azure OpenAI

Microsoft CEO Satya Nadella used his company's earnings call to hype up Microsoft's special position in the AI race as a primary partner for OpenAI.

Nadella noted that Microsoft's Azure OpenAI Service brings together advanced models, including ChatGPT and GPT-4, with the enterprise capabilities of Azure.

"Azure took share as customers continue to choose our ubiquitous computing fabric from cloud to edge, especially as every application becomes AI-powered," Nadella said. "We have the most powerful AI infrastructure, and it's being used by our partner, OpenAI, as well as NVIDIA and leading AI startups like Adept and Inflection to train large models."

Google Sees AI Generating Cloud Growth

Alphabet CEO Sundar Pichai is also strongly optimistic about what AI will do for Google Cloud.

"A number of organizations are using our generative AI large language models across Google Cloud platform, Google Workspace, and our cybersecurity offerings," Pichai said. "We are bringing our generative AI advances to our cloud customers across our cloud portfolio."

Amazon Sees AI and Cost Cutting as Keys to Cloud 

Amazon CEO Andy Jassy commented during his company's earnings call that despite economic challenges he sees plenty of opportunity in the cloud.

"In AWS, what we're seeing is enterprises continuing to be cautious in their spending in this uncertain time," Jassy said. "Customers are looking for ways to save money however they can right now."

Jassy pulled quote

One of the great attributes of the cloud is that you can scale seamlessly up or down as demand dictates, which is not the case with on-premises infrastructure, Jassy said. That's important because the majority of the world's IT spend is still on-premises, he added.

"If you believe that equation is going to flip, which we do, it's going to move to the cloud," Jassy said.

The opportunity for machine learning and AI is the other key driver of growth.

"In my opinion, few folks appreciate how much new cloud business will happen over the next several years from the pending deluge of machine learning that's coming," Jassy said. "I think so many customer experiences are going to be reinvented and invented that haven't existed before, and that's all going to be spent, in my opinion, in the cloud."

About the author

 Sean Michael Kerner headshotSean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.




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