The AI Arms Race: Amazon to Spend Over $100 Billion on AI in 2025
Amazon joins the AI arms race, pledging over $100 billion in 2025 for AI, primarily for its cloud division AWS.
Matilda
The AI Arms Race: Amazon to Spend Over $100 Billion on AI in 2025
The tech world is abuzz with news of massive AI investments, and Amazon is the latest to join the fray. CEO Andy Jassy announced during the company's Q4 2024 earnings call that they predict capital expenditures exceeding $100 billion in 2025, with the "vast majority" dedicated to bolstering the AI capabilities of Amazon Web Services (AWS). This represents a significant increase from the $78 billion Amazon spent on capital expenditures in 2024. Jassy indicated that Q4 2024's capex of $26.3 billion is a good indicator of what to expect on an annualized basis for 2025, suggesting a total investment of around $105.2 billion. Why the Huge Investment? Amazon's aggressive investment in AI is driven by the belief that advancements in AI technology, even if they lead to lower costs, will ultimately fuel increased demand. Jassy argues that this surge in demand will benefit AWS, which offers a wide range of AI services. "Sometimes people assume that if you can reduce the …