Amazon’s cloud unit reports 28% sales growth, topping estimates

Amazon Web Services recorded 28% revenue growth in the first quarter, beating analysts’ estimates, as the cloud infrastructure leader boosted its investment in Anthropic and prepared to work more closely with OpenAI.

Revenue at AWS rose to $37.59 billion in the period from $29.27 billion a year earlier, Amazon said in its earnings release on Wednesday. Analysts polled by StreetAccount had expected $36.64 billion. The unit accounted for almost 21% of its parent’s overall revenue.

While AWS remains atop the cloud infrastructure market, it’s facing increased competition from Microsoft Azure and Google’s cloud division, which are also partnering with the big artificial intelligence labs and offering more models and services.

Microsoft said on Wednesday that revenue from Azure and other cloud services jumped 40%, while Alphabet said revenue from Google Cloud, which includes infrastructure and corporate productivity apps, went up some 63%.

AWS represents a critical source of earnings for Amazon. The segment’s operating income increased about 23% to $14.16 billion, well above StreetAccount’s $12.84 billion consensus.

OpenAI said during the quarter that it would expand an existing $38 billion AWS commitment by $100 billion over eight years, with Amazon planning to invest $50 billion in OpenAI. Earlier this month, Amazon agreed to invest up to $25 billion in Anthropic, on top of the $8 billion that it has poured into the AI startup in recent years, as part of an expanded agreement to build out AI infrastructure.

AWS’ position in AI strengthened further this week. On Monday, OpenAI said Microsoft will lose its status as sole cloud provider for certain computing jobs, followed by an announcement the next day that AWS would make OpenAI models available in the Amazon Bedrock cloud service for building AI agents and applications.

Also during the quarter, AWS said it would bring out cloud services based on low-latency silicon from AI chipmaker Cerebras, which is looking to go public.

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