AI lives up to expectations! Amazon, Microsoft, Google - the "three cloud giants" in the United States return to high growth

Thanks to the strong enthusiasm of enterprise customers for artificial intelligence, the cloud computing divisions of the three major US cloud giants - Amazon, Microsoft, and Google - saw explosive performance in the first quarter, injecting a shot in the arm for the sluggish Wall Street investors.

Among the three giants, Amazon, which was the last to report its financial results, saw its cloud computing division AWS revenue grow by 17% year-on-year in the first quarter, exceeding Wall Street's expected 15%, and accelerating growth for two consecutive quarters.

Thanks to strong cloud revenue, Amazon achieved a $100 billion annual revenue scale for the first time.

Microsoft Azure and Google Cloud also performed well, achieving year-on-year revenue growth rates of 31% and 28% respectively in the first quarter, both surpassing market expectations.

In recent years, the growth rate of cloud infrastructure providers has been as high as 60%. Due to more businesses shifting to online operations during the pandemic, the demand for cloud computing has sharply increased. However, despite the deteriorating business environment, these companies had to readjust their budgets last year and cut back on cloud computing expenses.

Now, the cloud computing divisions of Amazon, Microsoft, and Google have all achieved strong growth in the first quarter, sending positive signals to the $270 billion cloud computing industry. Executives and analysts say that companies are now starting to resume spending on cloud computing.

Analyst Gil Luria of D.A. Davidson & Co said, "From the performance of AWS, Microsoft Azure, and Google Cloud, it is clear that two things are happening simultaneously - artificial intelligence is driving growth, and other areas of cloud spending are also accelerating."

Microsoft CEO Satya Nadella said during the first-quarter earnings call, "The number of Azure AI customers continues to grow, and average spending is also increasing." He also mentioned that over 65% of Fortune 500 companies are customers of Azure OpenAI services.

The financial report shows that AI services contributed 7 percentage points to the growth of Azure in the first quarter, higher than the 6 percentage points in the previous quarter.

Alphabet CEO Sundar Pichai said during the first-quarter earnings call that over 60% of well-funded AI startups and nearly 90% of AI unicorns are using Google Cloud.

"Workloads are inevitably continuing to migrate to the cloud, and IT spending is also continuing to concentrate on large platforms, including hyperscale providers," said Rishi Jaluria, an analyst at RBC Capital Markets