Big 3 Cloud Providers Eye Future Growth Beyond AI as Cloud Adoption Surges

Over the last year, the big three cloud providers — Amazon, Microsoft, and Google — have routinely attributed the increase in cloud adoption to the rapid growth of generative AI. While that's certainly true, there is still a lot of runway for cloud growth that doesn't involve AI.

Amazon, Microsoft, and Google all recently reported their latest financial earnings, once again showing strong cloud momentum and adoption.

Alphabet, parent company of Google, was the first to report on July 23. Google Cloud revenue jumped by 28% year-over-year to $10.35 billion. On July 30, Microsoft reported its fiscal fourth-quarter earnings, with cloud quarterly revenue coming in at $36.8 billion, up 21% year-over-year. Amazon reported on Aug. 1, with Amazon Web Services cloud revenue increasing 19% year-over-year to $26.3 billion.

"We are now seeing more normalized growth of the cloud market, though some speed bumps do remain," commented John Dinsdale, a chief analyst at Synergy Research Group.

Google Continues to View AI as Key to Cloud Growth

At Google, AI is still seen as a key driver of cloud growth, though it's not the only driver.

"Year to date, our AI infrastructure and generative AI solutions for cloud customers have already generated billions in revenues and are being used by more than 2 million developers," Sundar Pichai, CEO of Alphabet, said during his company's earnings call.

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Pichai also pointed out that the majority of Google's top 100 customers are already using its generative AI solutions, including the Gemini models across Vertex and AI Studio.

Microsoft Sees Data and AI Growth in the Cloud

At Microsoft, both data and AI usage are helping to move the cloud forward.

"We now have over 60,000 Azure AI customers, up nearly 60% year-over-year, and average spend per customer continues to grow," Microsoft CEO Satya Nadella said during his company's earnings call.

Microsoft also saw success with its cloud-based data platform offerings. Nadella noted that Microsoft Fabric, its AI-powered next-generation data platform, now has more than 14,000 paid customers, with revenues up 20% quarter-over-quarter.

Why Amazon Web Services Is Still Growing

Amazon CEO Andy Jassy highlighted three macro trends driving AWS growth during his company's earnings call.

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AWS is seeing significant growth in both generative AI and non-generative AI workloads.

"Our AI business continues to grow dramatically with a multibillion-dollar revenue run rate despite it being such early days," Jassy said.

The company is investing heavily in custom silicon for AI workloads, including Trainium for training and Inferentia for inference. These chips offer compelling price performance compared with traditional GPUs. AWS' software offerings like Amazon SageMaker, Bedrock, and Amazon Q are gaining traction with customers for AI development and deployment.

Looking ahead, Jassy remains optimistic about AWS' growth potential.

"About 90% of the global IT spend is still on-premises," he said. "If you believe that equation is going to flip, which I do, there's a lot of growth ahead of us in AWS as the leader."