Amazon's AWS CEO: We're building the building blocks of AI

Core Viewpoint - Amazon Web Services (AWS) remains a leading player in the cloud market, but its growth rate has slowed, causing some investors to hesitate [1][3]. Group 1: AWS Performance and Market Position - AWS CEO Matt Garman emphasized that the company is in the early stages of developing foundational technologies for AI applications and workflows [2][5]. - In Q2, AWS revenue increased by 17.5% year over year to $30.9 billion, surpassing estimates of $30.8 billion [4]. - AWS is a crucial profit driver for Amazon, but there are concerns about its ability to match the growth of Microsoft Azure, which saw a 39% revenue increase to $29.9 billion [3][4]. Group 2: Future Growth Potential - Morgan Stanley's Brian Nowak expressed optimism about AWS's growth potential, citing strong demand for generative AI and traditional workloads, with a projected revenue growth of over 20% in 2026 due to upcoming data center capacity [5][6]. - AWS is reportedly overcoming data center buildout bottlenecks, which is essential for future revenue growth [6]. Group 3: Challenges and Competition - AWS faces challenges such as rising capital expenditures, capacity constraints, and increasing competition from Microsoft Azure, Google Cloud, and Oracle [7]. - Analysts highlight that AWS's success will depend on its ability to innovate and combine specialized hardware, partnerships, and software to create unique AI offerings [7].