Amazon announced in its first-quarter earnings call for 2024 on Tuesday that the company’s advertising revenue has reached $11.82 billion, up 24% from the same period of 2023.
This growth has been fueled by Amazon's move to serve ads by default on its Prime Video streaming service in multiple markets, with customers having the option to pay an additional $2.99 per month to opt out of these ads.
Amazon's advertising efforts have outpaced those of other major digital ad players, such as Meta and Alphabet.
“Our advertising efforts continue to benefit from the growth of our Stores and Prime Video businesses,” Amazon CEO Andy Jassy said in the earnings conference call.
“It’s very early for streaming TV ads but we’re encouraged by the response,” he added.
Generative AI Propels AWS' Growth
Amazon Web Services (AWS), the company's cloud computing division, has experienced a resurgence in growth, with revenue increasing by 17% in Q1 of 2024 — the fastest pace since 2022.
This acceleration has been largely attributed to the contribution of Amazon's generative AI investments and offerings.
Coinciding with the earnings report is the announcement that it makes Amazon Q, the company’s generative AI-powered assistant for enterprises and developers, available to the public.
Reinvent work with #AmazonQ. 💬
— Amazon Web Services (@awscloud) April 30, 2024
A #generativeAI assistant that virtually does it all. Makes data more accessible, writes code, answer questions, generates content, solves problems, manages #AWS resources, & takes actions—with built-in security.
🔗 https://t.co/TwYO6PZQIOpic.twitter.com/eHmI2Hv7sz
According to its CEO, tens of thousands of customers are already using Amazon's cloud-based AI service Bedrock, and he expects many more companies to embrace these technologies as they discover how easily they can be integrated into their products.
Jassy also believes the generative AI business opportunity could last 10-20 years, as all AI workloads will be built from scratch on the cloud, unlike the previous shift from on-premise servers to the cloud.
“The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate (now at a $100 billion annual revenue run rate),” Jassy said.
The Amazon CEO further stated that the generative AI-related business is currently on track to drive multiple billions of dollars in AWS revenue this year.
Amazon reported $143.3 billion in total revenue, up 13% from a year ago, which marks a milestone as the biggest profit Amazon has made in a quarter and exceeds Wall Street expectations.
