Amazon reported its highest first-quarter profit on Tuesday as it continued to wring efficiencies out of its retail business and recharge growth in its cloud computing operations.
The company was also for the first time on track to have $100 billion in annual cloud computing sales.
The company had $143.3 billion in revenue in the first three months of the year, up 13 percent from a year earlier. Profit more than tripled, to $10.4 billion. The results beat analysts’ expectations.
“It was a good start to the year across the business, and you can see that in both our customer experience improvements and financial results,” Andy Jassy, Amazon’s chief executive, said in a statement.
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After a year of companies paring back tech spending, Amazon’s lucrative cloud computing business has been regaining steam. Sales from cloud computing were up 17 percent, to $25 billion. The growth was the fastest pace in more than a year. Operating income for that business grew 84 percent to $9.4 billion, accounting for most of the company’s operating profit.
Five U.S. Cases Targeting Big Tech
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For years, Apple, Google, Meta and other tech giants operated unfettered. Now, regulators around the world are taking steps to compel them to make major shifts to their products and businesses. In the United States, several cases could result in orders for the companies to change their practices. Here’s what to know.
Apple. The Justice Department joined 16 states and the District of Columbia in filing a lawsuit against Apple, arguing that it had violated antitrust laws with practices that were intended to keep customers reliant on their iPhones by preventing other companies from offering applications that compete with Apple products.
Amazon. The Federal Trade Commission and 17 states have sued the e-commerce giant, accusing it of protecting a monopoly over swaths of online retail by squeezing merchants and favoring its own services. The outcome could alter the way Americans shop online.
Meta. The Federal Trade Commission and more than 40 states have accused Facebook of buying up its rivals, particularly Instagram in 2012 and WhatsApp two years later, to illegally squash competition that could have one day challenged the company’s dominance. They have called for the deals to be unwound.
Google. The Justice Department has targeted the tech giant with two separate lawsuits. In 2020, the agency accused Google of illegally protecting its monopoly over search and search advertising. In 2023, the Justice Department and a group of eight states accused it of illegally abusing a monopoly over the technology that powers online advertising.
Amazon’s share price was up more than 3 percent in after-hours trading on Tuesday.
Amazon spent about $14 billion on capital expenses and leases in the quarter, a figure particularly driven by investments in cloud computing, Brian Olsavsky, Amazon’s finance chief, said on a call with investors. That amount was about $1 billion more than for the same period last year. He said Amazon expected to spend more as the year goes on, “primarily to serve the generative A.I. opportunities that we are seeing.”
The company has been building data centers and making other infrastructure investments to keep up in the race to turn A.I. advances into real businesses. Microsoft has been closing Amazon’s lead in cloud computing, in part from customers wanting access to advanced A.I. systems from its partner, the start-up OpenAI.
(The New York Times sued OpenAI and Microsoft in December, claiming copyright infringement of news content related to their A.I. systems.)
Sales of generative artificial intelligence services amounted to “multibillion dollars” a year, Dave Fildes, Amazon’s head of investor relations, said on the press call. Last week, Microsoft said A.I. accounted for more than a fifth of its cloud computing growth, leading analysts to estimate the A.I. sales were about $1 billion in the quarter.
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“Generative A.I. may be the largest technology transformation since the cloud,” Mr. Jassy said in a letter to shareholders this month.
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