EThe second-quarter results of the cloud industry’s major players – Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc‘s Google (NASDAQ:GOOGL) – have unveiled significant shifts in the industry dynamics. 

“Enterprise spending on cloud infrastructure services increased by $10 billion year-over-year to reach $65 billion, marking an 18% growth rate, slightly down from the 19% growth in the previous quarter,” said data from Synergy Research.

“The current economic climate has crimped some growth in cloud spending, but the market continues to expand at a healthy rate despite those short-term challenges,” said the firm.

Despite underperforming in terms of growth compared to Microsoft and Alphabet, Amazon maintained its top position. Collectively, these three giants held 65% of the market share, with second-tier providers comprising the remainder.

“Looking ahead, Synergy Research anticipates a marginal slowdown in cloud spending growth due to macroeconomic influences, enterprise cost-cutting measures, localized challenges in China, and the significant existing market base,” said Benzinga. However, the increasing adoption of AI use cases in cloud services is predicted to be a driving force.

Microsoft for the first time guided its Azure cloud business, with expected revenue growth of 25% to 26% in constant currency, including contributions from Azure AI Services. 

Notably, Amazon introduced the AI-enhancing cloud service Bedrock and developed AI-specific chips named Inferentia and Trainium. In an interview with CNBC in early July, Jassy said the company’s in-house AI efforts will give it a real edge.

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Edited by Judy J. Rotich and Newsdesk Manager