Amazon has seen AWS growth rates dropping substantially over the last three quarters, from 20% to 16% to 12% this quarter. That’s not the kind of trend any company wants to see, but especially for a division like AWS, which has been a growth driver for Amazon over the years. Still, Amazon CEO Andy Jassy believes that the company might have turned the corner in its cloud business, while putting those results into context.

“While customers have continued to optimize [their cloud spend] during the second quarter, we’ve started seeing more customers shift their focus toward driving innovation and bringing new workloads to the cloud. As a result, we’ve seen AWS’ revenue growth rate stabilize during Q2 where we reported 12% year-over-year growth,” Jassy said in the earnings call with analysts.

CFO Brian Olsavsky, who had warned analysts in their February meeting that growth was dropping into the teens, was much more optimistic this week, especially given the prospect of future revenue the company believes it will eventually be generating from interest in generative AI.“I would add that we saw Q2 trends continue into July. So, generally I feel the business has stabilized, and we’re looking forward to the back-end of the year in the future because, as Andy said, there’s a lot of new functionality coming out with — and there’s a lot of spend that will be in this area for all the great solutions that are out there for generative AI and large language models, as well as machine learning solutions that we’ve always had for customers. So, [we’re] optimistic and starting to see some good traction with our customers’ new volume,” Olsavsky told analysts.

Jassy points out that given the size of the business, it’s still growing pretty robustly, even if it’s not growing at the rate it had been in prior years.

“If you think about the AWS business being an $88 billion revenue run rate business, to grow double digits on a business that size with the amount of cost optimizing that’s been happening, to grow double digits, you have to be adding a lot of new customers and a lot of new workloads just to grow double digits,” Jassy said.And he sees AI, which even prior to the growing popularity of generative AI, was a decent business. “What I would say is that we have had a very significant amount of business in AWS driven by machine learning and AI for several years. And you’ve seen that largely in the form of compute as customers have been doing a lot of machine learning training and then running their models and production on top of AWS and our compute instances,” he said.

He says while generative AI is still very much at the early stages, it has the potential to drive much more business over time.

All that said, Olsavsky didn’t offer third-quarter guidance for AWS either, so it begs the question if he’s truly as optimistic as he and Jassy are suggesting, at least in the short term.

Long term, however, it would seem that AWS still has a lot of room for growth in the years ahead, especially with plenty of workloads still left to move to the cloud, and the promise of building applications on top of large language models continuing to boost business.