:max_bytes(150000):strip_icc()/GettyImages-2154451134-a960071f1c934441a5f06cd65b42effe.jpg "Amazon Follows Google, Meta, and Microsoft With Plans To Boost Spending on AI")
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Key Takeaways
- Amazon said it expects to spend over $100 billion in capital expenditures this year, with the “vast majority” going to AI for Amazon Web Services.
- The company is the latest Big Tech firm to announce it’s boosting expected AI infrastructure spending this year.
- CEO Andy Jassy said to expect “a lot of leapfrogging” between Amazon and its AI rivals.
Amazon (AMZN) said it expects to spend over $100 billion in capital expenditures this year, making it the latest tech giant to say it’s ramping up investments in artificial intelligence infrastructure.
The $26.3 billion Amazon spent on capex in the fourth quarter is “reasonably representative” of the rate it expects to spend in 2025, CEO Andy Jassy said on the company’s earnings call. That would bring Amazon’s capex over $100 billion for the full year, the “vast majority” of which would go toward AI for Amazon Web Services, he said.
That comes after Amazon recently rolled out Trainium2, the latest model of its in-house chips. The company is working with Anthropic, the startup behind the Claude large language model, to build a server containing hundreds of thousands of Trainium2 chips with significantly more computing power than the current Claude models were trained on. Looking ahead, Jassy said Amazon expects to preview even more powerful Trainium3 chips later this year.
Amazon’s plans to ramp spending on AI follow similar moves by its Big Tech peers. Just earlier this week, Google parent Alphabet (GOOGL) forecast $75 billion in capital expenditures this year to support expanding its AI capacity. Last week, Meta (META) said it plans to invest $60 billion to $65 billion this year, while Microsoft (MSFT) said it plans to spend $80 billion on infrastructure in its 2025 fiscal year.
“We’re all learning from one another,” Jassy said Thursday, nodding to Amazon’s U.S. rivals as well as Chinese AI startup DeepSeek, adding that Amazon has added DeepSeek models to its Bedrock and SageMaker development platforms. “You have seen and will continue to see a lot of leapfrogging between us.”
The rapid rise of DeepSeek, which recently claimed to develop a competitive AI model for a fraction of the cost of stateside competitors, has raised concerns about American firms’ spending on AI. However, Bank of America analysts said the development could be “AI’s Sputnik moment,” with growing competition pushing U.S. hyperscalers like Amazon to act with greater urgency and raise their investments rather than pull back.
Shares of Amazon slid 4% in extended trading Thursday after the company’s earnings call and its outlook missed estimates. The stock was up 40% over the past 12 months through Thursday’s close.