Amazon Web Services (AWS) has reported a 19% year-on-year (YoY) increase in revenue, and a 72% uptick in operating income in its second quarter results, and pledged to grow its artificial intelligence (AI)-related datacentre investments.
The quarter covers the three months to 30 June 2024, which also saw Amazon.com report a total revenue of $148bn, which was up 11% on the previous year, and post a 91% YoY increase in profit to $14.7bn.
Amazon.com CEO Andy Jassy said the performance of its public cloud arm had been buoyed by renewed enthusiasm from enterprises for infrastructure modernisation and cloud migration projects, after years of focusing on optimising their existing cloud assets.
“This modernisation enables [AWS users] to save money, innovate at a more rapid clip, and drive productivity in most companies’ scarcest resources – developers,” said Jassy, during a conference call with analysts, transcribed by Seeking Alpha.
“Companies of all sizes are excited about leveraging artificial intelligence [AI] … and our AI business continues to grow dramatically with a multibillion-dollar run rate, despite it being such early days. But we can see in our results and conversations with customers that our unique approach and offerings are resonating.”
AWS also reported a 2% drop in operating margin, which Amazon chief financial officer Brian Olsavsky said was nothing out of the ordinary for the company.
“We’ve long said we expect AWS operating margins to fluctuate over time, driven in part by the level of investments we’re making at any point in time,” he said.
“We remain focused on driving efficiencies across the business, which enables us to invest to support the strong growth we’re seeing in AWS, including generative AI.”
On that point, he said the company’s capital investments are expected to be higher in the second half of 2024 as it builds out its datacentre infrastructure in support of the demand for AI services.
“The majority of the spend will be to support the growing need for AWS infrastructure as we continue to see strong demand in both generative AI and our non-generative AI workloads.”
AWS is far from the only public cloud firm ramping up its investment in its AI-supporting infrastructure, as Microsoft disclosed in its most recent set of results that $13.9bn of the capital expenditure the company reported in its latest financial statement would be spent on beefing up its AI and cloud resources.