Amazon’s cloud business grew at a slower pace than expected in the first quarter, a third straight revenue miss.

Revenue at Amazon Web Services increased 17% to $29.27 billion, while analysts polled by StreetAccount had expected $29.42 billion. The growth slowed from 18.9% in the fourth quarter.

AWS, which accounted for about 19% of its parent company’s total revenue, is the world’s top provider of cloud infrastructure. Microsoft, its top competitor, announced first-quarter Azure cloud growth and guidance for the business that exceeded consensus on Wednesday. Google, the No. 3 supplier, came in a touch below consensus on cloud revenue last week.

Cloud computing is still showing healthy growth despite signals elsewhere of a more challenging economy. Automakers and retailers have begun preparing for higher costs or lower demand because of sweeping tariffs on goods imported to the U.S. that President Donald Trump announced in early April.

Amazon said first-quarter AWS operating income totaled $11.55 billion, higher than the $10.52 billion StreetAccount consensus. The segment’s operating margin of 39.5% was the widest it has been at least since 2014.

During the quarter, AWS said it was launching a service for streaming video games, and forming an agentic artificial intelligence group.

In February, management called for roughly $105 billion in 2025 capital expenditures, some of which will go toward data centers containing chips that can train and run artificial intelligence models from Anthropic and other cloud clients. Amazon CEO and former AWS chief Andy Jassy said in an April letter to shareholders that the cost of AI for customers will come down over time, due in part to Amazon’s custom chips that represent an alternative to Nvidia graphics processing units.

The AWS AI business has billions in annualized revenue, Jassy said on a conference call with analysts.

“Run rate continues to grow triple digit year over year percentages, and is still in its very early days,” he said.