Source: Wall Street News
AI technology stirs up the cloud computing landscape.
According to media reports, some analytical data indicated that$Microsoft (MSFT.US)$The scale of the Azure cloud business has reached$Amazon (AMZN.US)$The AWS cloud business is three-quarters of the size, and five years ago, Azure was only half the size of AWS.
Thanks to the boom in artificial intelligence and cooperation with Open AI, the revenue of Microsoft's Azure cloud business increased by 30% in the latest fiscal quarter, while the revenue growth rate of Amazon's AWS cloud business was 13%, less than half.
The integration of artificial intelligence may be where Azure competes.
At the beginning of 2023, Microsoft officially announced the addition of ChatGPT to the Azure cloud service. It is reported that Microsoft has been continuously deploying GPUs in its data centers so that customers can run AI models, including GPT-4, in Azure.
Jamin Ball, a partner at investment company Altimeter Capital, said that some companies may prioritize Azure. On the one hand, they are excited by the artificial intelligence concept, and on the other hand, considering the close partnership between Microsoft and OpenAI, which currently occupies a leading position in the AI field.
Currently, many companies have added generative AI capabilities to their products. On the latest earnings call, Microsoft CEO Nadella said, “We now have 53,000 Azure AI customers.”
Compared to Microsoft, Amazon is one step late in integrating AI into the cloud business. Three months after Microsoft's official announcement, the Amazon Cloud department announced the launch of a new generative AI tool. Currently, in addition to the Anthropic model that it supports, it also supports various other large models.
Amazon CEO Andy Jassy said on the latest fiscal quarter conference call: “Generative AI will eventually bring Amazon tens of billions of dollars in revenue over the next few years.”
As of now, though, Azure is growing much faster.
The cloud business has become an important part of Microsoft, accounting for approximately 29% of the company's total revenue. According to relevant data, the gross margin of Microsoft's cloud business has increased from 42% in 2016 to 72% in the latest quarter. Cloud business revenue mainly comes from commercial Office subscriptions, LinkedIn and Dynamics 365 enterprise software, and the commercial portion of the Azure cloud business.
According to reports, in addition to providing basic computing and storage, Microsoft also provides users with cloud services including high-profit databases and monitoring tools. Nadella said that next, cloud optimization work will start with improvements in electricity, cooling, data center design, and chips and software.
Yun Kim, an analyst at Loop Capital, said in a report that Azure's revenue growth may accelerate in the future.
Kim wrote:
“We expect the Azure business to accelerate in the next fiscal year (or second half) as new cloud deployments and the massive new workloads that generative AI is intended to bring.”
Editor/jayden