AI-fuelled growth: Amazon, Google, and Microsoft earnings compared

The latest earnings reports from Amazon, Alphabet and Microsoft highlight how AI is driving Big Tech’s growth. AI-powered products and cloud services played a major role in their revenue expansion, reinforcing each company's competitive position. Below, we break down their AI-related earnings results, focusing on cloud AI services, AI-driven advertising and new AI products, followed by an analysis of their competitive positioning and future outlook.

What's in the numbers?

Amazon Q4 2024: AI Fuels Cloud and Advertising Growth

Amazon’s strong Q4 results were driven by AWS’s AI momentum and advertising expansion.

• AWS Cloud AI Growth: AWS revenue grew 19% YoY to $28.8B, recovering from a prior slowdown. AI innovation, such as Trainium2 AI chips and the launch of Nova AI models, attracted enterprises running AI workloads, increasing AWS adoption.
• Advertising Strength via AI: Amazon’s ad revenue hit $17.3B, up 18% YoY, making it the second-largest digital ad player after Google. AI-enhanced targeting, sponsored listings and video ads on Prime Video helped drive this growth.
• Strategic AI Investments: Amazon plans over $100B in capex for 2025, mainly for AWS and AI infrastructure. CEO Andy Jassy emphasised that cheaper AI models (like DeepSeek) could increase cloud AI adoption, benefiting AWS in the long run.

Amazon’s broad AI strategy—from custom AI chips to third-party AI models (via Bedrock)—positions AWS as a leading AI infrastructure provider.

CEO Andy Jassy noted during the earnings call “And so when AWS is expanding its CapEx, particularly in what we think is one of these once-in-a-lifetime type of business opportunities like AI represents, I think it's actually quite a good sign, medium to long term, for the AWS business…AI represents, for sure, the biggest opportunity since cloud and probably the biggest technology shift and opportunity in business since the Internet.”

Google Q4 2024: AI-Powered Ads and Cloud AI Growth

Google’s earnings showcased AI’s role in advertising and cloud services, despite slight cloud growth challenges.

• Advertising Resilience with AI: Google’s Search ad revenue grew 13% YoY to ~$54B, as AI-generated summaries increased engagement. YouTube ad revenue rose 14% to $10.5B, boosted by political ads and AI-enhanced content recommendations. Total ad revenue surpassed $72B, reaffirming Google’s ad industry dominance.
• Google Cloud AI Expansion: Google Cloud revenue rose 30% YoY to $12B, fuelled by demand for TPUs and Vertex AI services. However, capacity constraints limited growth, and Google Cloud still lags AWS and Microsoft in market share.
• AI-Driven Strategy: Google plans $75B in capex for 2025, focusing on AI infrastructure and data centres. CEO Sundar Pichai emphasised Google’s “full-stack” AI strategy—from TPU chips to Gemini AI models and AI-infused consumer apps like Search and YouTube.

Google is infusing AI across its ecosystem to protect its ad business and accelerate Google Cloud’s AI adoption.

CEO Sundar Pichai noted during the earnings call “I think part of the reason we are so excited about the AI opportunity is, we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down, which will make more use cases feasible. And that's the opportunity space. It's as big as it comes, and that's why you're seeing us invest to meet that moment.”

Microsoft Q2 FY2025: AI-Driven Cloud and Software Growth

Microsoft’s fiscal Q2 2025 (Oct-Dec 2024) results highlight AI’s deep integration across cloud and software products.

• Azure’s AI-Powered Growth: Azure revenue grew 31% YoY, outpacing AWS and Google Cloud. AI services contributed significantly, with AI revenue growing 157% YoY.
• $13B AI Revenue Run-Rate: Microsoft’s AI business now exceeds $13B annually, up 175% YoY. AI-infused cloud services, including Azure AI and GitHub Copilot, are driving growth. AI assistants such as Microsoft 365 Copilot and GitHub Copilot boost subscription revenue and reinforce Azure demand. Additionally, Bing’s AI search enhancements drove a 21% increase in search ad revenue.
• Investing in AI Leadership: Microsoft expects ~$80B in capex for FY2025 to scale Azure AI.

Microsoft’s end-to-end AI ecosystem—from cloud services to AI-infused productivity tools—positions it as a leader in enterprise AI adoption.

CEO Satya Nadella noted during the earnings call “And as AI becomes more efficient and accessible, we will see exponentially more demand. Therefore, much as we have done with the commercial cloud, we are focused on continuously scaling our fleet globally and maintaining the right balance across training and inference as well as geo distribution.”

Competitive Positioning and AI Outlook

Cloud AI Market Share

• AWS remains the largest cloud provider, benefiting from enterprise trust and AI investments. Its 19% AWS growth shows renewed momentum, driven by AI infrastructure demand.
• Microsoft Azure is growing the fastest at 31% YoY, thanks to its early lead in generative AI (via OpenAI) and strong Microsoft 365 integration.
• Google Cloud, while growing 30% YoY, still trails AWS and Azure in market share, though TPUs and AI-focused services are helping close the gap.

AI in Advertising

• Google leads digital ads with $72.5B in Q4 revenue, leveraging AI-driven ad personalisation to sustain double-digit growth.
• Amazon’s ad business, at $17.3B, is growing faster (18% YoY) and benefits from AI-enhanced commerce ads and Prime Video ad expansion.
• Microsoft, while smaller in ads, saw Bing search ad revenue rise 21% YoY, as GPT-4-powered search features boosted engagement.

Strategic AI Initiatives

• Amazon’s AI strategy: Open AI ecosystem, in-house AI chips (Trainium, Inferentia) and third-party AI models via AWS Bedrock.
• Google’s AI focus: Full-stack AI innovation (TPUs, Gemini models, AI-powered Search and YouTube) drives both Cloud and Ads business.
• Microsoft’s approach: Tightly integrate AI into enterprise software (Microsoft 365, Windows, GitHub) and leverage OpenAI partnership to scale Azure AI usage.

The AI Investment Race

Each company is investing aggressively to expand AI capabilities:

• Amazon plans $100B+ capex in 2025, focused on AWS AI infrastructure.
• Google is spending $75B on AI-focused data centres and hardware.
• Microsoft projects $80B in capex for Azure AI expansion, making AI infrastructure a top priority.

In terms of competitive positioning, this spending will likely widen the gap between the Big Three and smaller competitors, as only a handful of firms can afford to build AI supercomputing grids at this scale. Investors are watching how effectively each company converts this spending into new revenue. So far, the trajectory looks promising: all three reported strong growth in AI-related metrics this quarter, and each is optimistic about AI’s impact on future results.

What’s Next?
With AI reshaping cloud computing, advertising and software, these companies are poised for continued growth. Their latest earnings confirm AI as a transformative force, and their massive AI investments will further widen their competitive edge.

For now, Amazon, Google and Microsoft remain the dominant players in the AI-driven economy, each leveraging unique strengths to capitalise on AI’s rapid evolution.