Microsoft's Azure revenue growing faster than Amazon's AWS, potentially overtaking in AI in 5 years.

From Nasdaq: 2024-08-06 05:19:00

Most AI development occurs in the cloud through services like Microsoft Azure and Amazon Web Services (AWS). These tech giants rent out computing power and host large language models to help developers create AI applications, with Azure recently growing revenue by 29% in the last quarter, fueled in part by AI. AWS, the leading cloud provider, saw a 19% revenue increase during the same period, with the gap between Azure and AWS narrowing consistently.

While Microsoft doesn’t disclose Azure’s specific revenue, it’s estimated to be around $18.4 billion based on the platform contributing half of Microsoft Cloud’s revenue of $36.8 billion. By comparison, AWS generated $26.3 billion in its latest quarter. However, with Azure’s growth rate outpacing AWS, Azure could potentially overtake AWS within the next five years, especially considering Microsoft’s strategic investments in AI like the $10 billion deal with OpenAI in 2023.

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John Mackey, former CEO of Whole Foods Market and a board member of The Motley Fool, has no relevant positions in the stocks mentioned. The Motley Fool has positions in Amazon, Microsoft, and Nvidia, along with various options recommendations. Keep in mind that the author’s views may differ from those of Nasdaq, Inc.



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