Amazon (AMZN) announced that it expects to allocate more than $100 billion in capital expenditures for 2025, marking a significant ramp-up in its investment in artificial intelligence (AI) infrastructure.
During the company’s fourth-quarter earnings call, CEO Andy Jassy revealed that Amazon spent $26.3 billion on capital expenditures in the final quarter of 2024. He noted that this figure is “reasonably representative” of the company’s anticipated spending pace for the upcoming year. A substantial portion of this expenditure will be directed toward Amazon Web Services (AWS) and AI development.
This announcement comes on the heels of Amazon’s recent launch of Trainium2, the latest iteration of its custom-built AI chips. The company is collaborating with Anthropic, the startup behind the Claude large language model, to develop a server outfitted with hundreds of thousands of Trainium2 chips, offering much greater computational power than the current Claude models were trained on. Jassy also indicated that Amazon plans to unveil even more powerful Trainium3 chips later this year.
Amazon’s push to expand its AI investments mirrors similar efforts by its major tech competitors. Just this week, Alphabet (GOOGL), Google’s parent company, projected $75 billion in capital expenditures for 2025 to support its growing AI capabilities. Meta (META) announced a planned investment of $60 billion to $65 billion, while Microsoft (MSFT) expects to spend $80 billion on infrastructure in the upcoming fiscal year.
“We’re all learning from each other,” Jassy remarked, referencing Amazon’s U.S. counterparts and Chinese AI startup DeepSeek. He highlighted that Amazon has incorporated DeepSeek’s AI models into its Bedrock and SageMaker development platforms. “Expect continued leapfrogging between us,” he added.
The rapid rise of DeepSeek, which recently claimed to have developed an AI model capable of competing with American counterparts at a fraction of the cost, has raised concerns over U.S. firms’ AI investment strategies. However, analysts at Bank of America suggested that the emergence of such competition could represent “AI’s Sputnik moment,” with growing global rivalry pushing American hyperscalers like Amazon to accelerate their AI investments rather than scale back.
Following the earnings call, Amazon’s stock dropped 4% in after-hours trading as the company’s financial outlook fell short of analyst expectations. Despite this, shares have surged 40% over the past year, reflecting strong overall growth.
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