Amazon will invest $100 billion into AI initiatives in 2025, the tech giant announced yesterday.
This figure marks a near $20 billion increase from 2024’s spending, and overtakes investment from tech companies Microsoft ($80 billion), Alphabet ($75 billion) and Meta ($65 billion).
Andy Jassy, CEO of Amazon, shared the company spent $26 billion in Q4 of 2024, the majority of which was directed toward AI for Amazon Web Services (AWS), Amazon’s cloud computing company. Jassy explained that the Q4 spending is “reasonably representative” of the quarterly spending rates which will be seen in 2025.
The investment announcement takes place against the backdrop of DeepSeek, the Chinese startup and ChatGPT rival sending shockwaves through the US tech market
DeepSeek rose in relevance with its significantly lower operation costs in comparison to US and European-based corporations – causing confusion as the training of its models was achieved with a $6 million expenditure.
The company failed to meet its forecasted benchmarks. The Q1 2025 guidance showed a revenue of $151-155.5 billion, which falls short of the forecasted $158.5 billion. A reported 19% increase in sales for AWS was also below predictions, mirroring shortfalls in sales for the cloud businesses of both Alphabet and Microsoft. These results, Jassy shared, are attributed to an inability to meet energy demands of AI software.
Regardless of the uncertainty surrounding artificial intelligence going into 2025, corporations like Amazon remain firm in its decision to invest further into data infrastructure and AI tools.
“I think that both our business, our customers and shareholders will be happy, medium to long-term, that we’re pursuing the capital opportunity and the business opportunity in AI.” Jassy said.
