[Alpha Biz= Reporter Kim Minyoung] U.S. Big Tech Amazon's operating profit more than tripled in the first quarter from a year earlier. As demand for generative artificial intelligence (AI) has exploded, the performance of "Big Three" in cloud industries such as Amazon, Microsoft (MS), and Google, which provide AI-related services, has increased significantly.
Amazon said on the 30th of last month (local time) that its first-quarter sales reached $143.3 billion, up 13% from a year earlier. Operating profit was $ 15.3 billion (21 trillion won), more than three times higher than $ 4.8 billion in the first quarter of last year.
The cloud sector, a major business, has grown rapidly. Amazon Web Services (AWS) sales rose 17% year-on-year to $ 25 billion (34 trillion won), exceeding the market forecast of $ 24.5 billion. Operating profit rose 84% year-on-year to $ 9.4 billion (13 trillion won). The operating profit ratio is 38%, the highest ever.
Although AWS growth slowed down somewhat last year as companies cut back on cloud spending, demand for generative AI is contributing to the growth of the cloud sector, Amazon explained. AWS provides AI platforms and computing resources for companies seeking to build generative AI-based applications (apps) or services. Amazon is investing in AI startup Anthropic and launched an enterprise AI chatbot called 'Amazon Cue' in November last year.
Amazon is the number one global cloud company, but it has been evaluated as a step behind its competitors Google and Microsoft in the field of generative AI. However, since last year, it has been steadily investing in the AI field and has become a performance.
Revenue from the advertising sector has also increased. The advertising effect of Prime Video, a streaming service, jumped 24% year-on-year to $11.8 billion, exceeding market expectations.
Cost reductions have also played a part. The company laid off more than 27,000 employees from 2022 to last year. Hundreds of employees were laid off in the first quarter of this year as well.
알파경제 Kim Minyoung (kimmy@alphabiz.co.kr)
