AWS confirms it: Cloud spending is back

Welcome to Runtime! Today: why AWS growth is "reaccelerating" after a rough year, GitHub is ready to find out if developers want a new AI-centric place to write code, and the latest funding rounds in enterprise tech.

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Spinning up

After last week's positive earnings reports from Microsoft and Google Cloud, enterprise tech's attention focused on AWS Tuesday to learn whether the cloud infrastructure pioneer was in step with its rivals or about to lose significant ground. Those rivals are still growing at a faster clip, but AWS turned in its best performance in over a year during the first quarter of 2024.

Revenue increased by 17% to $25 billion, a much faster pace than AWS generated during most of 2023 that also exceeded Wall Street's expectations for the quarter, according to CNBC. "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)," Amazon CEO Andy Jassy said in a press release.

• "Companies have largely completed the lion's share of their cost optimization and turned their attention to newer initiatives," Jassy later said on a conference call with analysts. 
• Unlike Microsoft, AWS did not attribute how much of its growth came from spending on generative AI services, but Jassy said spending at AWS AI services is on "a multibillion-dollar run rate."
• AWS's operating profit also surged 83% to $9.4 billion, once again subsidizing Amazon's retail and international operations.
• "We expect the combination of AWS reaccelerating growth and high demand for genAI to meaningfully increase year-over-year capital expenditures in 2024, which given away the AWS business model works is a positive sign of the future growth," Jassy said.

AWS also announced Tuesday that Amazon Q, the generative AI assistant it showed off at re:Invent 2023 to decidedly mixed results, is now generally available.

• While AWS ideally used that time to improve upon the preview version, it also split the assistant into three varieties: Amazon Q Apps, Amazon Q Business, and Amazon Q Developer.
• Q Apps is a no-code application development platform released as a preview that promises non-coders that they can build AI apps with natural-language text inputs.
• Q Business allows users to query their existing corporate data to generate summaries through a web chat interface.
• And Q Developer is the new name of CodeWhisperer, AWS's coding assistant rival to GitHub Copilot.

The challenge for AWS will be sustaining this quarter's momentum as AI acolytes prepare for the release of OpenAI's GPT-5, which is expected to arrive this year and will, of course, make its debut on Microsoft Azure.

• “We’re seeing strong demand signals from our customers on the AWS side. They’re signing longer deals with larger commitments, many with generative AI components,” Amazon CFO Brian Olsavsky said on a media conference call, according to Bloomberg.
• Sometimes it's hard to remember that there are still a ton of non-generative AI applications that need some place to run, and AWS remains as competitive for those workloads as any cloud.
• But one headwind for AWS remains venture-capital spending, which hit a five-year low in the first quarter of 2024.
• Early-stage startups (and their check-writing VCs) have been some of AWS's best customers over the past decade, and it doesn't look like that trend is going to reverse itself any time soon.

The space between

GitHub is already one of the most widely used tools in the average software developer's daily workflow. Will those developers decide to spend some of the most important moments of their day — the time spent actually writing code — on the platform?

That's the question GitHub is asking with GitHub Copilot Workspace, a software development environment first previewed last year. Released this week as a technical preview, Copilot Workspace is a dedicated place for software developers to write and edit code with GitHub's Copilot AI assistant baked right into the experience.

GitHub Copilot is the breakout hit of the generative AI boom, and Copilot Workspace is a bet that developers will welcome an experience built around that tool. But developers are picky about where and how they write their code, and Copilot Workspace has the awkward task of overcoming significant traction behind Visual Studio Code, by far the most widely used development environment and one of its parent company's crown jewels.

Enterprise funding

Island raised $175 million in Series D funding, valuing the enterprise browser company at $3 billion.

Corelight scored $150 million in Series E funding, and Crowdstrike joined Cisco in backing network security startup.

SafeBase landed $33 million in Series B funding, allowing the startup to expand its automated vendor security reviews for software buyers.

Seam raised $5 million in seed funding for its data service that allows users to create SQL queries using natural language.

The Runtime roundup

AMD reported an 80% jump in data-center revenue, amid concerns that the AI chip boom was subsiding.

Canadian pharmacy London Drugs closed stores for the second straight day Tuesday after a "cybersecurity incident," and it's not clear when they'll reopen.

In related news, CISA released security guidelines for the 16 "critical infrastructure" sectors of the economy as covered by the Department of Homeland Security's AI task force.

Marriott acknowledged that it was actually not using strong encryption to protect customer data at the time of a 2018 breach, after arguing in court for years that it was.

OSI co-founder Bruce Perens issued a draft proposal for a new type of open-source license that would require any company making more than $5 million by using that software in a commercial product to contribute 1% of their revenue to an organization that would compensate maintainers.

AWS will change its pricing policy for "unauthorized" S3 bucket requests after software developer Maciej Pocwierz raised concerns about someone who ran up his storage bill after inadvertently choosing the same name as his for their storage bucket.

Thanks for reading — see you Thursday!