Amazon Web Services (AWS), the cloud unit of Amazon, is facing challenges after years of leading the market. Once seen as the company that created the modern cloud, AWS is now struggling to keep its edge. On Monday, the platform suffered a major outage, affecting hundreds of companies and apps for about 15 hours. Meanwhile,
Google announced it will provide up to 1 million AI chips to Anthropic, a startup Amazon invested in, showing that rivals are now aggressively challenging AWS’s position, as spotted by Bloomberg.
AWS Faces Growing Competition In AI Cloud Market
AWS is still the largest cloud provider, but rivals like Microsoft and Google are catching up fast. Startups and companies building AI models are increasingly looking elsewhere, partly because AWS has been slow to launch new AI services.
As stated by Bloomberg, internal bureaucracy and layers of management have slowed decision-making, making it harder to move quickly in the fast-changing AI market.
Even corporate clients are exploring competitors’ services, leaving AWS trying to regain its innovative edge.
Amazon Cloud Outage Highlights Challenges
The outage on Monday disrupted platforms for trading, education, and city services in Seattle, highlighting how dependent businesses are on AWS.
Analysts told Bloomberg that AWS has also struggled with keeping startups as customers, which could affect its long-term growth in AI. While AWS continues to offer popular services like Bedrock and SageMaker, critics say it is losing the startup-first culture that once helped it dominate the cloud market.
Investments in AI chips like Trainium2 show Amazon is trying to compete on cost and performance, but competitors’ moves, such as Google supplying chips to Anthropic, indicate AWS is in a tighter race than ever.
Even with these challenges, AWS remains a cloud leader with a large customer base. Its focus on infrastructure, cost-effective AI chips, and expanding services may help it regain momentum.
But the cloud landscape is changing quickly, and analysts warn that AWS can’t rely solely on its past dominance to stay ahead.
