Retail giant Amazon has released its first quarter earnings report and while revenue is booming, it’s cloud computing and AI which are driving forward its sales.

The Seattle-based company reported a Q1 2024 operating profit of A$23.65 billion. Revenue increased 13 per cent to A$221.49 billion for the quarter ending March 31.

Net income more than tripled to $16.o7 billion from A$4.9 billion over the same period in 2023.

Sales in its Amazon Web Services cloud unit were A$38.64 billion, up 17 per cent year-on-year. In comparison, Amazon’s main e-commerce business reported sales of A$84.39 billion in Q1 2024. AWS generated a profit of A$15.46 billion in the most recent quarter. The unit’s operating margin of 37.6 per cent is reported to be the widest since Amazon began disclosing sales for its cloud business.

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The cloud computing business is where Amazon sees the next phase of growth. “We’re seeing strong demand signals from our customers on the AWS side,” chief financial officer Brian Olsavsky told reporters. “They’re signing longer deals with larger commitments, many with generative AI components.” He added that generative artificial intelligence now represented a “multi-billion dollar revenue run rate business” for Amazon, indicating the potential that the company attributes that division to generate.

In a statement alongside the earnings report, chief executive Andy Jassy said the company’s continuing focus on AI has reaccelerated the growth rate of AWS.

Olsavsky added Amazon’s capital expenditures would “meaningfully increase” in 2024, mainly to support AWS growth and building generative AI capabilities. The company has said it will spend more than A$231.85 billion to build out and operate data centres in the coming years.

In Australia, Amazon’s customers include Atlassian, Qantas, NAB and government agencies including the Australian Bureau of Statistics, NSW Health Pathology and the Western Australian Department of Education. Major retailers rely on Amazon Web Services too. In 2022, for example, Kmart Australia re-platformed its e-commerce store to AWS.

AWS’s Australian revenue increased 22 per cent to $3.33 billion in 2023 from $2.7 billion in 2022 and $1.1 billion in 2021. AWS has already committed to spending A$13.2 billion in Australia between 2023 and 2027 with an aim to grow its cloud computing operations in Melbourne and Sydney.