In a recent earnings call, Amazon CEO Andy Jassy announced that the company's generative AI business has reached a "multibillion-dollar" revenue run rate. The surge in demand for generative AI is contributing to the growth of Amazon Web Services (AWS), the company's cloud computing business.

Customers have shown strong interest in harnessing the power of AI to transform their businesses and enhance customer experiences. With this in mind, Amazon's enterprise clients are enthusiastic about leveraging generative AI technology. Jassy stated, "Our AWS customers are also quite excited about leveraging gen AI to change the customer experiences and businesses. We see considerable momentum on the AI front where we've accumulated a multibillion-dollar revenue run rate already."

This announcement comes in the wake of Amazon's solid Q1 2024 earnings, with AWS revenue surging 17% year-on-year, outpacing the company's overall revenue growth of 13%. The success of generative AI in driving AWS growth has been evident through strong demand signals, longer deals, and larger commitments from Amazon's customers.

Amazon CFO Brian Olsavsky further emphasized the positive outlook, stating, "We are seeing strong demand signals from our customers and longer deals and larger commitments, many with generative AI components." Olsavsky believes that this trend will continue to fuel capital expenditure growth, as the company spent $14 billion in capex in Q1 2024, with expectations for further investment throughout the year.

With AWS already hitting a $100 billion annual run rate and its trailing 12-month revenue of $94.4 billion surpassing that of 466 companies in the S&P 500 index, Amazon's success in the cloud computing market has garnered attention. Even Tesla CEO Elon Musk expressed surprise, exclaiming, "Wow."

Looking towards the future, Jassy remains optimistic about the potential of AWS and the rise of generative AI. He believes that over the next 10 to 20 years, generative AI will predominantly be cloud-based, presenting a significant opportunity for AWS to continue its growth trajectory.

As a result of this positive news, Amazon's shares saw a 2.45% increase in premarket trading on Wednesday. It is clear that Amazon's generative AI business is making a substantial impact on the company's growth and solidifying its position in the cloud computing market.

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