Amazon’s Secret Weapon, AWS, Slows Down as Growth Stalls

Cloud computing revolutionized the technology industry by allowing companies to create apps, lease and access software, and rent computing power with just an internet connection. Amazon Web Services (AWS) was among the pioneers of cloud infrastructure services, launching in 2006 and leading the way for other technology giants to offer similar services. However, recent reports show that AWS’s growth has significantly slowed down, raising concerns for investors about the company’s largest profit generator.

AWS generated revenue of roughly $21 billion in the first quarter, marking a 16% year-over-year increase and the slowest rate of growth since 2014. Despite this, it’s important to consider macroeconomic conditions, which have caused a broad pullback in cloud growth across the industry. Microsoft Azure and Google Cloud also experienced a slowing in growth, with Amazon still holding 32% of the market share. AWS’s slip in market share may be due to various factors, such as customers’ sensitivity to current economic conditions or Microsoft’s investment in ChatGPT parent OpenAI. While AWS’s situation is concerning, it’s still too early to draw any conclusions.