Amazon to invest $100bn in AI this year

Amazon plans to invest $100bn in artificial intelligence in 2025, focusing on data infrastructure through Amazon Web Services (AWS). CEO Andy Jassy said last quarter’s $26bn spend was indicative of future investments.

The spending aligns with tech rivals Alphabet, Microsoft, and Meta, despite competition from China’s DeepSeek. Jassy expects strong AI demand, predicting that while costs per unit will drop, total spending will rise as companies expand their AI capabilities.

Amazon’s investment surpasses Alphabet’s $75bn and Microsoft’s $80bn. The company reported 10% year-on-year revenue growth in Q4 2024, reaching $187.8bn, slightly above estimates. However, Q1 2025 sales are projected at $151bn–$155.5bn, below forecasts. A strong dollar could reduce revenue by $2.1bn.

AWS sales grew 19% to $28.8bn but fell short of expectations, mirroring cloud capacity struggles at Alphabet and Microsoft. Jassy cited supply chain challenges, including motherboard shortages and AI energy demands.

Amazon has cut costs by streamlining logistics and reducing middle management to sustain its data center expansion. Meanwhile, its retail division grew 8% in Q4, and advertising revenue jumped 18% to $17.3bn.

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