Artificial Intelligence drives the growth of cloud computing for major technology companies | Latest Technology Updates

In a positive turn of events for Wall Street’s technology giants, Amazon.com, Microsoft, and Alphabet have all reported better-than-expected sales at their cloud computing units in recent days. This surge in growth in the $270 billion cloud infrastructure market is fueled by a renewed interest in artificial intelligence, driving a rebound in spending by corporate customers.

Amazon, the last of the trio to report on Tuesday, revealed that its cloud computing arm AWS grew by 17% in the January-to-March period, surpassing Wall Street’s growth estimate of 15% and reaching a $100 billion annual run-rate for the first time. Similarly, Microsoft’s Azure and Google Cloud also exceeded expectations, with growth rates of 31% and 28% respectively in the first quarter of the year.

Analysts attribute this growth to the increasing adoption of AI by businesses, with D.A. Davidson & Co analyst Gil Luria noting that AI is not only contributing to the growth of cloud computing but also accelerating overall cloud spending. Microsoft CEO Satya Nadella highlighted the growing number of Azure AI customers and the increasing average spend, with more than 65% of Fortune 500 companies now being Azure OpenAI Service customers.

Alphabet CEO Sundar Pichai also emphasized the importance of AI in driving growth, with more than 60% of funded generative AI startups and nearly 90% of genAI unicorns using Google Cloud. RBC Capital Markets analyst Rishi Jaluria pointed out that there is a continuous migration of workloads to the cloud, with IT spending consolidating towards large platforms like the hyperscalers.

Overall, the strong performance of these tech giants in the cloud computing sector is a clear indication of the positive impact of AI investment and the growing demand for cloud services among corporate customers.