Akamai Technologies CEO Details AI Inference Cloud Push, 45%-50% Cloud Growth at Conference

Key Points

• Akamai is moving aggressively into AI inference with a roughly $250 million investment and large purchases of Blackwell 6000 systems; an initial tranche deployed across 20 cities is expected to reach GA at quarter end, beta demand is sold out, and meaningful revenue should begin late this year with larger impact next year.
• Cloud infrastructure and edge compute is the fastest‑growing segment—Q4 revenue was $94 million (+45% YoY)—and Akamai is guiding for about 45%–50% growth as it targets latency‑sensitive AI, live video, ad selection, commerce, and robotics use cases.
• Security remains the largest revenue contributor (about 10% growth), with API security and Guardicore driving momentum ($90 million, +35% YoY), and the company plans selective price increases to help offset an estimated $200 million memory‑cost headwind this year.

Akamai Technologies NASDAQ: AKAM CEO and founder Tom Leighton outlined the company’s growth priorities and how management is positioning the business for an AI-driven shift in internet workloads, speaking at the Raymond James conference in a discussion led by senior telecom analyst Frank Louthan.

Security remains the largest revenue contributor

Leighton said that most of Akamai’s revenue comes from security, which he described as growing at about 10%. He cited Akamai’s “market leading” products in areas such as web application firewall (WAF), DDoS mitigation, and bot management, and said newer offerings—API security and Guardicore segmentation—are growing “very fast.”

In Q4, Leighton said API security and Guardicore segmentation delivered $90 million of revenue, up 35% year-over-year, and he characterized these products as important drivers of future growth. He also said Akamai is investing in AI-related security capabilities, arguing that as enterprises adopt more AI, it creates a significant new attack surface.

Cloud infrastructure services and edge compute as key accelerators

Leighton pointed to cloud infrastructure services as the fastest-growing product area, saying the segment finished Q4 at $94 million, up 45% year-over-year. He added that the company expects growth to accelerate through the year and said Akamai is “calling for 45%–50% growth in revenue” for that business.

He framed Akamai’s compute strategy as an extension of what the company did previously in content delivery and security: placing capabilities close to users. By deploying compute logic nearer to end users, he said Akamai can deliver lower latency, improved scalability, high reliability, and competitive pricing.

As a proof point, Leighton said “all the hyperscalers” use Akamai’s compute platform for mission-critical use cases, despite having their own cloud platforms, because Akamai can provide better performance for latency-sensitive workloads. Examples he shared included:

• Live video: Leighton said one hyperscaler uses Akamai for live sports streaming, in part to synchronize viewing so “everybody sees the action at exactly the same time,” which he noted can matter for betting-related applications.
• Ad selection: Another hyperscaler uses Akamai for ad selection, which he described as a use case where speed benefits from being performed locally.
• Commerce performance: He said commerce companies rely on performance and reliability, and that richer, AI-driven user experiences can translate into higher conversion rates where speed matters.
• Real-time device and robotics management: Leighton referenced a large new customer with capabilities to manage fleets of robots, cars, and automated systems that require real-time responsiveness.

Inference Cloud: AI inference positioned for distributed demand

Leighton emphasized that, in his view, AI inference and AI “agents” will be major future drivers of compute demand, particularly as new hardware enables faster model response times. He argued that as AI becomes more video-centric and personalized, distributed infrastructure will be necessary not only for latency but also for bandwidth and concurrency, comparing the challenge to large-scale live sports streaming.

On Akamai’s Inference Cloud initiative, Leighton said the company discussed a $250 million investment and a large purchase of Blackwell 6000 systems. He said the initial tranche was deployed last fall in 20 cities and is expected to reach general availability at the end of the quarter, adding that it is already sold out from beta customers.

Leighton said the company is now deploying a much larger tranche and that a “good chunk” is already committed under a four-year deal with a large customer. He said revenue from the tranche being deployed now would likely begin “towards the end of the year,” with a larger impact expected next year, noting that the company must receive, deploy, and activate servers before they are utilized.

CDN delivery outlook and pricing discipline

While highlighting Akamai’s status as the operator of what he called the world’s largest, most reliable, and most scalable content delivery network, Leighton also discussed ongoing pressure in the delivery segment. He said Akamai has guided to a mid-single-digit decline in delivery revenue for the year, describing delivery revenue as a mix of traffic growth and per-unit pricing declines.

Leighton said the company is remaining disciplined on pricing, including choosing not to take certain business and declining some large “spiky events” if the economics are not attractive. He added that traffic trends have been better over the last year or so and that he expects that to continue. He also said Akamai is generally paid more than competitors for delivery, depending on the product, due to performance and reliability.

Memory costs and capital allocation

On security pricing, Leighton said pricing is holding up well and that the company expects to increase pricing in some cases this year, partly due to higher memory costs. He said Akamai estimates an additional $200 million cost impact this year purely from increased memory costs. He added that this is not an impediment to growth and said Akamai can obtain the components it needs, but it is adjusting by keeping older servers in service longer and reducing memory purchases where possible.

Regarding capital allocation, Leighton said Akamai generally buys back equity distributed to employees and also repurchases additional shares opportunistically, averaging about 1% of shares outstanding per year. He said the company repurchased about $800 million last year, in part related to a convertible transaction, and noted no intended shift in strategy. He said capital is also used for M&A and for ongoing CapEx to operate the business.

On M&A, Leighton said Akamai is looking in both security and compute, describing security as fast-moving and stating the company has been happy with acquisitions including Noname (API security) and Guardicore (micro-segmentation). He emphasized discipline on valuation and said potential deals would likely be product adjacencies that fit the current platform and align with known buyers and sales motions.

In closing, Leighton identified a key investor misperception: that Akamai is still viewed primarily as a CDN company. He said investors are increasingly recognizing Akamai as a cloud company with accelerating growth, pointing again to meaningful scale in cloud infrastructure services and the fact that hyperscalers are customers of Akamai’s cloud business.

About Akamai Technologies NASDAQ: AKAM

Akamai Technologies, Inc is a leading provider of content delivery network (CDN) services and cloud security solutions designed to optimize and safeguard digital experiences. Leveraging a globally distributed platform, the company accelerates web and mobile content delivery for enterprises, media companies, e-commerce platforms and government agencies. Its edge computing architecture brings processing power closer to end users, reducing latency and improving application performance across geographies.

The company's core offerings include content acceleration, web and mobile performance optimization, media delivery, and a suite of cybersecurity solutions that protect against DDoS attacks, application-layer threats and bot-driven fraud.

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