Despite Amazon's Web Services continuing to be a revenue generator for the firm, sales growth has been slowing. In the quarter, the firm rolled out a service that enables the deployment of generative AI systems.Amazon reported Thursday that revenue from its cloud unit, AWS, increased 12% year over year in the second quarter, a speedier pace than analysts had anticipated. Revenue for the quarter totaled $22.1 billion, beating the $21.79 billon consensus among analysts surveyed by StreetAccount. In comparison, AWS revenue grew nearly 16% in the first quarter.Analysts estimated AWS to generate $5.24 billion in operating income, yet AWS ultimately yielded $5.4 billion in operating income, down 5% year over year. This marks the third consecutive quarter AWS operating income has declined, potentially as a result of mounting economic concerns and corporate leaders' interest in streamlining their companies' use of cloud infrastructure.Following suit, last week Microsoft executives suggested customers would persist with optimizing existing workloads on Azure in the third quarter.Amazon CEO, and formerly head of AWS, Andy Jassy added on a conference call with analysts that customers have begun to shift their focus from optimizing to driving innovation with the help of cloud technology and bringing new workloads to the cloud.In terms of staying competitive, AWS has recently introduced Bedrock, a service allowing organizations to deploy generative AI models to generate text and images in response to input. The company is also investing $100 million in the launch of a Generative AI Innovation Center.Competitors Microsoft and Google have also made moves to capitalize off generative AI. Microsoft's Azure OpenAI Service became available in January, months before the Bedrock announcement.In an interview with CNBC in June, AWS CEO Adam Selipsky stated the race for generative AI had just begun.
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