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

The growth of generative artificial intelligence businesses is surprising even the tech industry’s most seasoned executives.

Amazon’s (AMZN) AI business is growing three times as fast as its cloud business did at a comparable stage of evolution, CEO Andy Jassy said on a conference call with analysts Thursday. “And we thought AWS grew pretty 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’s estimates with its third-quarter earnings. Cloud revenue grew 19% to more than $27 billion. Sales at the unit have accelerated this year amid surging demand for AI. 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 have demand for,” Jassy said.

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

Microsoft’s challenges bringing cloud capacity online was a key factor behind the company’s disappointing revenue guidance and the subsequent tech sell-off Thursday. (Amazon did not provide a comparable cloud revenue forecast for the current quarter on Thursday.)

Jassy said that semiconductors are currently the hardware holding companies back from meeting demand. Amazon has developed its own AI chips—Trainium for training models and Inferentia for running those models—as it seeks to plug the gap between demand and supply for AI hardware.

Trainium 2, the chip’s second iteration, “will start to ramp up in the next few weeks,” Jassy said. “And we have a lot of customer interest.”