Originally posted on Data Center POST
At infra/STRUCTURE 2024, held in September at the Wynn Las Vegas, Jabez Tan, Head of Research with Structure Research, provided insights into the transformative impact of artificial intelligence (AI) on cloud computing and data center infrastructure. His analysis revealed a seismic shift in the industry driven by rapid AI adoption.
Cloud Growth Acceleration
Despite initial skepticism about sustainability, the cloud market has experienced significant growth acceleration in recent years. Jabez highlighted that “as we head to the end of 2023 into 2024, you saw this re-acceleration of growth, particularly from the major players.” This trend is particularly evident in Azure’s remarkable resilience and growth.
AI’s Growing Share of Cloud Revenue
Microsoft’s Azure serves as a prime example of AI’s increasing importance in cloud services. According to Jabez, “AI is accounting for a greater percentage of their overall growth… now represents eight percentage points of growth.” This translates to approximately $1.2 billion in AI-attributed revenue per quarter for Azure.
Major cloud providers are aggressively investing in AI infrastructure, with Google asserting that “the risk of under investing is dramatically greater than the risk of over investing.” This sentiment reflects the industry-wide belief in AI as a critical technological shift.
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