Amazon wants to invest $100 billion in AI. The company announced on February 6 that it plans to spend $100 billion in 2025. It plans to spend this whopping amount on big projects and improvements, mainly focused on artificial intelligence (AI). This is more than what it spent last year, which was about $83 billion.
The CEO of Amazon, Andy Jassy, had already predicted in October that the company would spend even more in 2025. The CEO said this will happen mostly because of its investments in generative AI.
After Amazon shared its earnings for the fourth quarter of the fiscal year, Jassy explained to investors that the company spent $26.3 billion in just the fourth quarter of 2024. This amount gives a good idea of how much Amazon will spend throughout 2025. He also mentioned that most of this money will go toward AI projects for Amazon Web Services (AWS), the company’s cloud computing business.
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Amazon is spending a lot of money on building data centers, improving its internet networks, and creating new technology because AI has become a new trend. The increased interest in AI started when OpenAI introduced ChatGPT in late 2022.
Now that the AI trend has grown stronger, Amazon wants to join and keep up with it. To do so, the company launched several AI-related products. These AI projects include its own AI models called Nova, special computer chips named Trainium, a chatbot to help with shopping, and a platform called Bedrock where other companies can sell their own AI models.
Other major tech companies are also investing heavily in AI. Google’s parent company, Alphabet, is one of these companies. It announced that it plans to spend around $75 billion this year to improve its technology.
Microsoft will invest $80 billion to build more AI data centers. Meanwhile, Meta expects to spend up to $65 billion to expand its computing power and storage facilities.
Amazon provided an update on its spending after revealing mixed financial results for the fourth quarter of 2024. While some parts of its earnings were better than expected, its sales forecast for the next few months was weaker than predicted. This caused Amazon’s stock price to drop by more than 4% in after-hours trading.
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The tech company’s CEO, Andy Jassy, told investors that all this spending will be worth it in the long run. He called AI a “once-in-a-lifetime business opportunity.” In other words, he believes AI is such a big deal that the company must invest now to make huge profits in the future.
Andy Jassy believes that investing in AI will benefit the company, its customers, and investors in the long run. He also mentioned that the company is spending money this year to improve its physical stores. Its main purpose in doing this is to speed up deliveries and lower costs.
Meanwhile, some people wonder why big tech companies spend so much on AI. A Chinese AI startup called DeepSeek recently made headlines. DeepSeek created an advanced AI model for less than $6 million in just two months. The company claims its model is as good as that of OpenAI. This news shook the stock market, causing major chip companies like Nvidia and Broadcom to lose a combined $800 billion in value. So, the tech companies are facing skepticism from people who believe they should not be spending so much when they can spend less with DeepSeek.