Amazon to invest over $100B in AI this year
What's the story
Amazon has announced plans to invest more than $100 billion in artificial intelligence (AI) this year.
The company's CEO Andy Jassy revealed during the fourth-quarter earnings call that most of this budget will go into boosting AI capabilities for Amazon Web Services (AWS), its cloud division.
The move comes despite recent speculation of cuts in AI budgets across the tech industry.
Investment growth
Amazon's AI investment: A significant increase from previous year
Jassy noted that the fourth quarter capex of $26.3 billion in 2024 is a fair indication of what to expect on an annual basis in 2025.
This means an estimated total investment of about $105.2 billion for the year, a significant jump from the $78 billion capex Amazon spent in 2024.
The tech giant stays bullish on its AI strategy despite fears of falling costs impacting revenue streams.
Demand surge
Lower AI costs could boost demand
Jassy dismissed fears about falling AI prices harming Amazon's revenue. He suggested that lower costs could actually stimulate greater demand for AI.
"Sometimes people make the assumption that if you're able to decrease the cost of any type of technology component...that somehow it leads to less total spend in technology. We've never seen that to be the case," Jassy stated during the earnings call.
Industry trend
Other tech giants also increase AI investments
Amazon's investment strategy matches with other tech giants who are also ramping up their AI spending.
Meta CEO Mark Zuckerberg announced last week that his company intends to invest "hundreds of billions" in AI in the long run.
Alphabet has raised its capex for 2025 by a whopping 42% to $75 billion, while Microsoft last month revealed plans to spend $80 billion on AI data centers in 2025 alone.