Amazon Web Services is Growing: A Record Year is Coming

Amazon Web Services on a Growth Trend

Amazon’s cloud infrastructure service Amazon Web Services (AWS) is on track to record its strongest growth year in three years, driven by extraordinary demand for computing power in the artificial intelligence sector. AWS achieved 33.1 billion dollars in sales in the first nine months of 2023, with an annual growth rate of %20.

Amazon provided this information while announcing its third-quarter earnings report. The operating income of the business segment was recorded at 11.4 billion dollars in the third quarter, up from 10.4 billion dollars in the same period of 2022.

Amazon CEO Andy Jassy stated during the earnings announcement, "AWS is growing at an unprecedented rate of %20.2 since 2022." He also emphasized strong demand for artificial intelligence and core infrastructure and noted that 3.8 gigawatts of capacity had been added in the last 12 months.

AWS opened an infrastructure region in New Zealand in the third quarter and plans to launch three more regions in the future. The cloud infrastructure provider secured significant new contracts across various sectors in the third quarter, including notable names in the artificial intelligence market.

In July, AWS partnered with Perplexity to launch the artificial intelligence browser company's enterprise product. Additionally, a collaboration was made with Cursor in the third quarter.

The intense infrastructure requirements in the field of artificial intelligence are also benefiting AWS’s competitors. OpenAI and Oracle signed a massive 300 billion dollars cloud computing agreement starting in September 2027. An agreement was also made for OpenAI to pay Oracle 30 billion dollars annually for data center services. Last week, Google and Anthropic announced a multi-billion dollar cloud agreement.

All these major agreements make it reasonable for cloud companies to capitalize on a market willing to pay big dollars for their services, even amidst some uncertainties about the future need for cloud infrastructure. Jassy expressed that they will continue to invest in artificial intelligence infrastructure and can see the demand. "We’re adding capacity while simultaneously converting it into profit," he added.

These developments come at a time when Amazon announced layoffs in 14,000 corporate positions. The company made this move as part of its plans to invest more in its artificial intelligence strategy.