Even after the rise of DeepSeek, a Chinese language startup that developed cutting-edge AI for lower than $6 million in comparison with Anthropic’s $100 million, Amazon is just not slicing again on its plans for AI spending. As an alternative of downsizing its AI expenditures, the e-commerce big is projecting to spend greater than ever.
On Amazon’s fourth quarter 2024 earnings name on Thursday, CEO Andy Jassy acknowledged that the corporate’s $26.3 billion in capital spending for the quarter was “fairly consultant” of what Amazon will spend in every quarter of 2025.
“The overwhelming majority” of that spend “is on AI,” Jassy stated. “We expect just about each utility that we all know of immediately goes to be reinvented with AI inside it.”
Associated: DeepSeek AI Price Much less Than $6 Million to Develop. Here is Why Meta and Microsoft Are Justifying Spending Billions.
That implies that Amazon will spend roughly $105 billion this 12 months on capital spending, most of which is able to go in direction of AI-related bills like advancing its personal AI chips. In response to the Wall Road Journal, Amazon’s forecasted spending in 2025 is 35% larger than 2024 and properly above the $86 billion analysts anticipated.
Amazon CEO Andy Jassy. Photographer: David Paul Morris/Bloomberg through Getty Photographs
Whereas Amazon’s expenditures are going up, so is its income.
Amazon’s quarterly earnings report was its finest but after a profitable vacation purchasing season, with income of $187.8 billion. Amazon’s fourth-quarter report positions it to overhaul Walmart as the corporate producing probably the most income on the S&P 500.
How does Amazon examine to Google, Meta, and Microsoft in AI spending?
The tech giants have all just lately introduced their AI-spending plans. Microsoft acknowledged it could spend $80 billion on AI infrastructure within the fiscal 12 months ending in June whereas Google’s mother or father firm Alphabet stated it could be spending $75 billion. Meta knowledgeable traders on its most up-to-date earnings name that it could spend $60 billion to $65 billion on AI this 12 months.
The spending goes in direction of infrastructure like AI knowledge facilities. Microsoft’s chief monetary officer Amy Hood stated on the corporate’s newest earnings name that Microsoft’s focus was on “long-lived property that may help monetization over the subsequent 15 years and past.”
Collectively, Microsoft, Alphabet, and Meta challenge spending at the very least $215 billion over their present fiscal years, a forty five% yearly improve per the WSJ.
Amazon continues to be on observe to be the largest AI spender of the bunch with its $105 billion prediction.
Associated: Microsoft Is on Observe to Hit a Main Milestone, the ‘Quickest Enterprise in Our Historical past,’ In response to Its CEO
