The rise of artificial intelligence or AI has got everyone talking about the big tech companies, but it looks like cloud computing revenue and profit will remain the key drivers of growth for some time.

The latest quarterly results from Microsoft (MSFT:NASDAQ), Alphabet (GOOG:NASDAQ) and Amazon (AMZN:NASDAQ) mainly beat analyst expectations, painting a rosier picture after months of layoffs and slashed spending. But while everyone was focused on AI, it’s clear where the money is being made.

Amazon, Google and Microsoft all reported double-digit sales growth and positive operating income in cloud computing for the first time.

Microsoft had already forecast that growth for its crucial cloud computing business Azure would slow to around 26% versus last year, but investors feared it would be worse. That might explain why the actual growth figure of 27% pleased the market.

The past quarter also saw Alphabet’s Google Cloud post a profit of $191 million, compared to a $706 million loss a year earlier. This is the first profit posted by Google Cloud since Alphabet began breaking out cloud revenue as a standalone item.

Combined, Amazon’s cloud arm Amazon Web Services (also known as AWS), Microsoft’s Azure and Alphabet’s Google Cloud are the three largest cloud computing operations on the planet. They accounted for roughly two-thirds of the $63 billion global cloud infrastructure services revenue during Q1 2023, according to data from Synergy Research.

‘There has been some angst about declining cloud growth rates, but the Q1 worldwide market value grew by more than $10 billion compared with the first quarter of 2022,’ said John Dinsdale, chief analyst at Synergy Research. ‘Clearly the relatively weak economy has caused some enterprises to more closely review spending on cloud services, but the market continues to grow despite those challenges.’

Lacking an AI narrative with clarity to match Microsoft and Alphabet, or Meta Platforms (META:NASDAQ) for that matter, may explain why Amazon shares have underperformed their peers in the wake of the results at the end of April, losing about 6%.

Consulting firm Gartner estimates that companies will funnel over half of their IT spending into cloud technology by 2025, and that chunk could be even higher if AI really takes off. It’s no wonder that investors are laser-focused on the growth trajectories of these cloud businesses.

There will be plenty more spending on AI, which looks likely to swallow more cash than it generates for now, and investors shouldn’t expect AI numbers to be broken out any time soon.

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