The company’s AWS Q4 quarterly earnings for 2023

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Amazon Web Services CEO Adam Selipsky speaks at the CERAWeek by S&P Global conference in Houston, Texas, on March 7, 2023.

F. Carter Smith | Bloomberg | Getty Images

Amazon said Thursday that its cloud division grew revenue 13% year over year in the fourth quarter, just in line with analysts’ forecasts. The company pointed to the growing appeal of cloud services for artificial intelligence.

Many big tech companies have been working quickly to release new products or update existing ones to take advantage of corporate interest in replicating AI capabilities a generation after they launched. OpenAI introduced ChatGPT chatbot at the end of 2023. Amazon Web Services, for its part, introduced the Q chatbot for developers and non-technical corporate employees, together with the Trainium2 chip for training AI models, in fourth quarter.

AWS posted $24.20 billion in revenue in the quarter. Analysts polled by StreetAccount had been looking for $24.20 billion. Growth increased from 12% in the third quarter.

“We expect the acceleration to continue in 2024,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with reporters.

The main challengers to US AWS are growing faster. Revenue from Microsoft’s Azure and other cloud services rose 30%, while revenue from Alphabet’s Google Cloud, which includes Google Workspace productivity software subscriptions, increased about 26% %.

Amazon’s cloud group turned over $7.17 billion in operating income. That’s up about 38% and higher than the StreetAccount consensus of $6.93 billion. That means AWS provided 54% of Amazon’s $13.21 billion in total operating income.

AWS now represents 14% of Amazon’s total revenue.

At the AWS Reinvent conference in Las Vegas in November, Adam Selipsky, Amazon’s cloud director from 2021, welcomed Nvidia CEO Jensen Huang took to the stage to announce an expanding partnership, which included a collection of Nvidia graphics processing units that can be used by Nvidia and cloud clients. Huang has also kept GPUs flowing to Google and Microsoft, among other cloud infrastructure providers.

In a statement, Amazon highlighted AWS AI wins in the quarter from the likes of Accor SA, Mitsubishi UFJ Financial Group, Salesforce and The Very Group.

This is breaking news. Please check back for updates.

Watch: AWS growth and margin expansion will drive Amazon stock higher in 2024: Evercore’s Mark Mahaney

AWS growth and margin expansion will drive Amazon stock higher in 2024: Evercore's Mark Mahaney

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