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Cloud services are turning tech companies around after last years slump.

Big Tech is making a comeback after a difficult year as the sectors heavyweights report their quarterly figures this week with investment in generative artificial intelligence (AI) paying off amid the cloud service race.

In 2022, tech companies saw massive layoffs and other cost-cutting measures after advertisers and consumers cut back on spending amid the unsettling economic climate.

But the launch of OpenAIs ChatGPT chatbot late last year is helping to turn tech companies around.

Microsoft, which has invested $10 billion (9.4 billion) in OpenAI, on Tuesday reported revenue growth of almost 13 per cent year-on-year to $56.5 billion (53 billion).

The tech giant's AI investments helped boost sales in the September quarter, especially in its Azure cloud programme.

"With copilots, we are making the age of AI real for people and businesses everywhere," Satya Nadella, chairman and chief executive officer of Microsoft, said in a statement.

"We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.

As for Googles parent company Alphabet, the company posted quarterly sales of $76.69 billion (72 billion), up 11 per cent from the same period a year ago.

But growth in Alphabets cloud sector was almost at a three-year low and cloud revenue was $20 million (18 million) less than analysts expected.The market reacted again on Wednesday with shares in Alphabet down 8 per cent.

Google has been racing to add generative AI to more of its products and Alphabets cloud division has been trying to catch up with Microsofts Azure and Amazon Web Services (AWS).

On Wednesday, AWS announced a major cloud development, saying the company will launch an independent cloud service in Europe.

Amazon Web Services European Sovereign Cloud will carve out a space for highly regulated companies and the public sector to store and keep data in the European Union.

It comes as the bloc gets tough on data being kept on non-European company servers and as it pushes for digital sovereignty, the idea that the EU should control its data and technology.

Amazon is due to release its Q3 results on Thursday.

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Microsoft, Alphabet and Amazon: AI instrumental in cloud race as ... - Euronews