Amazon CEO Andy Jassy speaks throughout a keynote handle at AWS re:Invent 2024, a convention hosted by Amazon Net Providers, at The Venetian Las Vegas on December 3, 2024 in Las Vegas, Nevada.
Noah Berger | Getty Photos Leisure | Getty Photos
Amazon stated Thursday it plans to spice up its capital expenditures to $100 billion in 2025, because it continues its investments in synthetic intelligence.
The capex determine exceeds final yr’s spending of roughly $83 billion. Amazon CEO Andy Jassy had predicted in October that the corporate’s 2025 capex would surpass final yr’s determine, primarily pushed by development in generative AI.
“We spent $26.3 billion in capex in This fall, and I believe that’s fairly consultant of what you count on an annualized capex fee in 2025,” Jassy stated on name with traders after the corporate launched its fourth-quarter earnings report. “The overwhelming majority of that capex spend is on AI for AWS.”
Amazon has been dashing to put money into information facilities, networking gear and {hardware} to satisfy huge demand for generative AI, which has exploded in reputation since OpenAI launched its ChatGPT assistant in late 2022. Amazon has launched a flurry of AI merchandise, together with its personal set of Nova fashions, Trainium chips, a buying chatbot, and a market for third-party fashions referred to as Bedrock.
Different tech corporations are additionally spending massive on AI. Google mother or father Alphabet stated Tuesday it expects to speculate about $75 billion in capital expenditures this yr. Final month, Microsoft stated it deliberate to spend $80 billion in fiscal 2025 on the buildout of information facilities to help AI workloads. Meta stated it should spend as a lot as $65 billion on capital expenditures as it really works to assemble extra information middle and computing infrastructure.
Amazon gave an replace on its spending plans after reporting combined outcomes for the fourth quarter. The corporate projected weaker-than-expected gross sales for the present interval, which overshadowed a beat on the highest and backside traces within the fourth quarter. Shares fell greater than 4% in prolonged buying and selling.
Jassy tried to reassure traders on the decision that the bounce in spending might be worthwhile, calling it a “once-in-a-lifetime sort of enterprise alternative.”
“I believe that each our enterprise, our prospects and shareholders might be joyful, medium to long-term, that we’re pursuing the capital alternative and the enterprise alternative in AI,” Jassy stated. “We even have capex that we’re spending this yr in our shops enterprise, actually with an goal in the direction of attempting to proceed to enhance the supply velocity and our value to serve.”
Tech corporations are going through contemporary skepticism of their AI spending plans after the early success of Chinese language AI startup DeepSeek. The lab claims it solely took two months and fewer than $6 million to develop its R1 mannequin, which it says rivals OpenAI’s o1. Markets have been roiled by the launch final week, with chipmakers Nvidia and Broadcom dropping a mixed $800 billion in market cap.
