Amazon CEO Says GenAI Is Growing Three Times Faster Than Cloud Computing Did

The growth of generative AI companies is surprising even to the most experienced technology industry executives.

Amazon’s (AMZN) AI business is growing three times as fast as its cloud business at a similar stage of development, Amazon (AMZN) CEO Andy Jassy said on a conference call with analysts on Thursday. “We thought AWS had grown very quickly,” Jassy added, referring to the Amazon Web Services cloud computing division he led before becoming CEO in 2021.

Amazon on Thursday topped Wall Street estimates with its third-quarter earnings. Cloud revenue grew 19% to more than $27 billion. Sales at the unit have accelerated this year amid increasing demand for artificial intelligence. Amazon’s AI business, which Jassy said is already growing by triple-digit percentages, could grow even faster once the company has the infrastructure to support booming demand, the CEO said.

“Pretty much everyone today has less capacity than they ask for,” Jassy said.

Jassy’s comments echoed those of Microsoft executives who said, on their company’s earnings call Wednesday, that demand for AI “remains higher than our available capacity.”

The challenges Microsoft faced in bringing cloud capacity online were a major factor behind the company’s disappointing revenue guidance and subsequent technology selloff on Thursday. (Amazon did not provide a similar cloud revenue forecast for the current quarter on Thursday.)

Semiconductors are currently the devices holding companies back from meeting demand, Jassy said. Amazon has developed its own AI chips — Trainium for training models and Inferentia to power those models — as it seeks to bridge the gap between demand and supply of AI hardware.

Trainium 2, the second iteration of the chip, “will start ramping up over the next few weeks,” Jassy said. “And we have a lot of customer interest.”