AI

Amazon bets on AI: $100 billion investment surpasses rivals

Amazon invests 100 billion dollars in AI, surpasses Microsoft and Alphabet, and focuses on growth through AWS.

Eulerpool News Feb 8, 2025, 5:28 AM

Amazon plans to invest around 100 billion dollars in its artificial intelligence (AI) and cloud infrastructure this year. This surpasses the US tech giants Alphabet and Microsoft, which are investing 75 billion and 80 billion dollars, respectively, in similar projects.

The investments are to be primarily channeled into Amazon Web Services (AWS), the company's cloud division that operates data centers and provides AI tools for customers. CEO Andy Jassy justified the massive capital expenditure with "significant demand signals" in the field of artificial intelligence.

Amazon reported a 10 percent increase in revenue to $187.8 billion for the fourth quarter of 2024, slightly exceeding analysts' estimates. However, the outlook for the first quarter of 2025 fell short of expectations: Amazon expects revenue between $151 billion and $155.5 billion, while analysts had expected $158.5 billion.

AWS recorded revenue growth of 19 percent to $28.8 billion, but slightly missed projections. The cloud division is struggling with capacity bottlenecks, particularly in sourcing motherboards and meeting power demands for compute-intensive AI applications.

Investors reacted cautiously: In after-hours trading, Amazon shares initially fell by as much as 7 percent before slightly recovering and closing with a loss of about 5 percent.

Jassy relies on cost-cutting measures in other business areas to finance the enormous investments. The e-commerce division grew by 8 percent in the final quarter, while advertising revenue climbed by 18 percent to 17.3 billion dollars.

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