How AWSâs Growth Challenges AI And Cloud Leaders
The AI competition among cloud providers has intensified as Amazon Web Services (AWS) sees success from its own suite of AI models called Nova, challenging established partnerships between Microsoft and OpenAI and Google and Anthropic.
The move comes amid a global shortage of graphics processing units (GPUs) used for AI training, prompting major technology companies to develop custom chips and infrastructure.
This means that AWS's launch of its Trainium2 processor and collaboration with AI research company Anthropic puts the company in good stead and signals its intention to control more of its AI computing stack.
Against this backdrop, AWS has reported a 19% increase in revenue to US$28.8bn for the fourth quarter of 2024, demonstrating continued demand for cloud computing services as organisations invest in AI capabilities.
The results approaches as parent company Amazon posted total revenue growth of 10% to US$187.8bn, supported by strong performance across its retail and cloud divisions.
AWS revenue growth shows cloud computing strength
AWS saw its revenue rise 19% year-over-year to US$28.8bn in the fourth quarter.
Operating income also increased to US$10.6bn compared with US$7.2bn in the same period last year.
Andy Jassy, President and Chief Executive Officer of Amazon, says: âThe holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners and employees who helped make it so.â
Amazon Nova and AWS AI tools signal market entry
The company's Nova foundation models are being used by companies including Deloitte, SAP and Robinhood.
For instance, Trainium2, a specialised chip designed for training AI models, the company claims offers 30-40% better price-performance than existing graphics processing unit (GPU) based systems.
"When we look back on this quarter several years from now, I suspect what we’ll most remember is the remarkable innovation delivered across all of our businesses.”
Andy says the quarter would be remembered for “our new Trainium2 AI chip, our own foundation models in Amazon Nova, a plethora of new models and features in Amazon Bedrock that give customers flexibility and cost savings, liberating transformations in Amazon Q to migrate from old platforms and the next edition of Amazon SageMaker to pull data, analytics and AI together more concertedly.
“These benefits are often realised by customers (and the business) several months down the road, but these are substantial enablers in this emerging technology environment and we’re excited to see what customers build.”
AWS expands AI model and data offerings
Amazon has additionally launched Amazon Bedrock Marketplace, a new capability in Amazon Bedrock that allows developers to discover, test and use over 100 specialised foundation models – and the new features include Prompt Caching and Intelligent Prompt Routing, technologies designed to reduce costs and processing time for AI applications.
- AWS revenue grew 19% to US$28.8bn in Q4 2024
- Amazon Nova AI models with customers including Deloitte, SAP and Robinhood
- New Trainium2 AI chips claim 30-40% better price-performance versus GPU-based systems
- AWS Bedrock Marketplace now offers access to over 100 AI models
- Total Amazon revenue increased 10% to US$187.8bn in Q4
Amongst AWSâs announcement of its new AWS capabilities was Project Rainier, a collaboration with Anthropic using hundreds of thousands of Trainium2 chips to build the worldâs largest AI compute cluster.
AWS has also launched Amazon Aurora DSQL, which it describes as a distributed database offering multi-Region availability and PostgreSQL compatibility.
The service claims to provide four times faster data processing compared to competing distributed SQL databases.
The company has further introduced S3 Tables, making its S3 storage service the first cloud object store with managed support for Apache Iceberg, an open table format for large analytics datasets.
AWS enterprise growth shows client base expansion
AWS has signed new agreements with organisations including the US Army, Intuit and PayPal, as well as expanding its global infrastructure, launching new data centre regions in Thailand and Mexico.
Amazon's overall business performance showed strength across segments, with the North America retail segment reported sales growth of 10% to US$115.6bn, while the International segment saw an 8% increase to US$43.4bn.
Looking forward, Amazon expects first quarter 2025 net sales between US$151bn and US$155.5bn, representing growth between 5% and 9%.
Andy says: "When we look back on this quarter several years from now, I suspect what we’ll most remember is the remarkable innovation delivered across all of our businesses.”
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