• Revenue at Amazon Web Services came in slightly lower than expected for the first quarter.
• The cloud unit announced a service for streaming video games during the quarter.

cloud business grew at a slower pace than expected in the first quarter, a third straight revenue miss.

Revenue at Amazon Web Services increased 17% to $29.27 billion, while analysts polled by StreetAccount had expected $29.42 billion. The growth slowed from 18.9% in .

AWS, which accounted for about 19% of its parent company's total revenue, is the world's top provider of cloud infrastructure. , its top competitor, announced first-quarter Azure cloud growth and guidance for the business that on Wednesday. , the No. 3 supplier, came in a on cloud revenue last week.

Cloud computing is still showing healthy growth despite signals elsewhere of a more challenging economy. Automakers and retailers have begun preparing for higher costs or lower demand because of sweeping tariffs on goods imported to the U.S. that President Donald Trump announced in early April.

Amazon said first-quarter AWS operating income totaled $11.55 billion, higher than the $10.52 billion StreetAccount consensus. The segment's operating margin of 39.5% was the widest it has been at least since 2014.

During the quarter, AWS said it was launching a service for , and forming an group.

Capital infrastructures for the quarter came out to $24.3 billion, up around 74% year over year. In February, management called for roughly $105 billion in 2025 capital spending, some of which will go toward data centers containing chips that can train and run artificial intelligence models from Anthropic and other cloud clients.

Amazon CEO and former AWS chief Andy Jassy said in an April that the cost of AI for customers will come down over time, due in part to Amazon's custom chips that represent an alternative to graphics processing units.

The AWS AI business has billions in annualized revenue, Jassy said on a conference call with analysts.

" I think we could be helping more customers and driving more revenue for the business if we had more capacity," he said. "We have a lot more Trainium2 instances and the next generation of Nvidia instances landing in the coming months." Trainium2, , is Amazon's next-generation chip for training AI models.

AWS has diversified away from China for components in the past six years, Jassy said.

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