Most AI development emanates through the cloud, with tech titans such as Microsoft and Amazon leading the charge. These tech giants, through Microsoft Azure and Amazon Web Services (AWS), operate central data hubs teeming with processing power sourced from industry stalwarts like Nvidia. They lease out this computational might to developers, facilitating the creation of AI applications.
Moreover, developers on Azure and AWS can tap into pre-built large language models, including those from premier AI startups like OpenAI and Anthropic, to expedite their endeavors.
AWS stands as the globe’s foremost cloud services and infrastructure provider, with Azure in a close second. However, Azure recently saw a 29% revenue surge in the last quarter (ending June 30), with a significant chunk of that attributed to AI alone. In contrast, AWS only experienced a 19% revenue uptick in the same period, showcasing a consistent trend:
Although Microsoft doesn’t actively disclose Azure’s revenue numbers, it recently divulged that the cloud platform accounted for roughly half of its “Microsoft Cloud” earnings. In its most recent period, Microsoft Cloud racked up $36.8 billion, hinting that Azure likely generated around $18.4 billion.
While Azure has ground to cover to reach AWS, which amassed $26.3 billion in revenue in its latest quarter, the existing 10% growth divergence suggests Azure might outpace AWS in the next five years – potentially sooner if the growth margin expands to levels witnessed earlier this year.
Microsoft stormed into the AI race early on by pledging a $10 billion investment in OpenAI in 2023. The startup’s latest GPT-4o models rank among the industry’s finest, now accessible on Azure. This can be a pivotal factor for developers weighing their cloud provider options.
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