Amazon, Microsoft and Google – the world’s three biggest cloud providers – fell short of meeting customer demand in the fourth quarter of 2024 (Q4 2024). The top executives of the three companies essentially point to a sole reason for this: capacity constraints in their data centers.
The capacity constraints stem from – shortages of AI chips, server components and energy supply issues – that are essentially hindering the growth of their cloud businesses, despite significant investments in AI infrastructure.

Amazon CEO Andy Jassy revealed on Thursday that

Amazon Web Services

(AWS), the company's cloud division, could achieve even faster growth if not for these capacity limitations. AWS reported a 19% increase in sales for the Q4 2024 at $28.8 billion – slightly below street estimates.

“It is true that we could be growing faster, if not for some of the constraints on capacity,” Jassy stated during an earnings call.

This sentiment was echoed by Microsoft's CFO Amy Hood, who recently acknowledged that the company is facing “a pretty constrained capacity place” in meeting demand for its Azure cloud services.
Sales tied to Azure and other cloud computing services grew 31%, however, it was slightly slower than the 31.8% that analysts estimated.
Microsoft is “innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,” said Microsoft CEO Satya Nadella.

Similarly, Google's leadership reported ending 2024 with ‘more (AI) demand than capacity’. While the company’s cloud business was profitable, it fell short in meeting analysts’ estimates.
“We will continue to invest in our Cloud business to ensure we can address the increase in customer demand,” said Alphabet and Google CEO Sundar Pichai.
“As we mentioned last quarter, the accelerating shift from AI training to AI inference has given us confidence to continue to increase our investment in our GPU rollout as we provision greater capacity to support demand in 2025. As a result, we expect network capex to be 12% to 13% of revenue for full year 2025,” added Alphabet CFO Thomas J. Seifert.

Despite record investments in data centers and AI infrastructure, these companies are struggling to procure the necessary resources, including specialized AI chips and server components, to meet this surging demand.
Amazon CEO Andy Jassy has announced that the company is poised to invest a staggering $100 billion in capital expenditure during 2025, with the majority of this investment dedicated to artificial intelligence (AI).
Alphabet, Google's parent company, revealed in its earnings call that it anticipates spending $75 billion on capital expenses in 2025. Microsoft has allocated $80 billion for AI in its current fiscal year, while Meta has committed $65 billion.