• Cloud unit contributed nearly a fifth of Amazon's quarterly revenue
• Operating income climbed to $14.16 billion, beating analyst expectations comfortably
• Microsoft Azure and Google Cloud also reported strong gains amid AI demand

Amazon Web Services (AWS) posted 28% year-on-year revenue growth in the first quarter, as it stepped up its artificial intelligence-related investments. In its earnings release on April 29, Amazon said AWS revenue rose to $37.59 billion from $29.27 billion a year earlier.

The cloud unit contributed almost 21% of Amazon's overall revenue in the quarter and remained a key earnings driver for the company. Even as AWS held on to its lead in the cloud infrastructure market, it faced stronger competition from Microsoft Azure and Google Cloud, both of which are expanding ties with major AI labs and adding more models and services.

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Amazon said AWS operating income increased about 23% to $14.16 billion, whereas rival firms also reported strong cloud growth. Microsoft said revenue from Azure and other cloud services jumped 40%, while Alphabet said revenue from Google Cloud, which includes infrastructure and workplace software, rose about 63%.

AWS' AI push gathered pace during the quarter. OpenAI said it would expand an existing $38 billion AWS commitment by $100 billion over eight years, with Amazon planning to invest $50 billion in OpenAI. Earlier this month, Amazon also agreed to invest up to $25 billion in Anthropic, in addition to the $8 billion it has already invested in the AI start-up in recent years, under an expanded agreement to build AI infrastructure.

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During the quarter, AWS also said it would launch cloud services based on low-latency silicon from AI chipmaker Cerebras, designed to reduce delays in processing. In a video appearance, AWS CEO Matt Garman said of Amazon's AI investments, "There isn’t just one winner".

The quarter underlined AWS' importance to Amazon, with strong revenue and profit growth alongside a broader push to deepen its role in the fast-growing AI infrastructure market.