Amazon, an American multinational technology company engaged in e-commerce and cloud computing, has announced plans to increase its investments in Artificial Intelligence (AI) this year.
The tech giant disclosed plans to raise its capital expenditure to an estimated $105.2 billion in 2025, marking a 35% rise from the $78 billion spent in 2024. The bulk of this investment will be channeled into artificial intelligence (Al) capabilities within its cloud division, Amazon Web Services (AWS), according to CEO Andy Jassy.
During the company’s fourth-quarter earnings call, Jassy highlighted that the $26.3 billion spent in Q4 2024 signals a strong annual spending trend for 2025.
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“We spent $26.3 billion in Cape in Q4, and I think that is reasonably representative of what you expect an annualized capex rate in 202. The vast majority of that capex spend is on AI for AWS”, he said on a call with investors.
Jassy tried to reassure investors on the call that the jump in spending would be worthwhile, calling it a “once-in-a-lifetime type of business opportunity.”
“I think that both our business, our customers, and shareholders will be happy, medium to long-term, that we’re pursuing the capital opportunity and the business opportunity in Al. We also have capex, that we’re spending this year in our stores business, really with an aim towards trying to continue to improve the delivery speed and our cost to serve”, he said.
The CEO further dismissed assumptions that decreasing Al’s costs would lead to reduced technology investments, comparing Al’s adoption to past tech revolutions like the internet and cloud computing.
Amazon has been investing in data centers, networking gear, and hardware to meet the vast demand for generative AI. This investment represents Amazon’s vision for collaborative technology that assists employees and improves safety and sustainability while expediting delivery speed.
Last year September, the tech giant announced the launch of several AI innovations that power users’ shopping and delivery experience. The company rolled out Vision-Assisted Package Retrieval (VAPR), an AI-powered solution that automatically identifies the right packages for drivers at each shop, which will be rolled out in 1,000 electric vans by Rivian in early 2025. VAPR projects green and red lights on packages at each stop, removing the need for drivers to manually sort them in the back of their vans.
Also, Amazon announced the roll-out of AI-powered shopping tools in its app. With this, shoppers can save time and energy shopping for products with Amazon’s new Al Shopping guides available in the Amazon Shopping app and mobile website. They help reduce the time customers spend researching before they buy by proactively consolidating key information they need with Amazon’s wide selection, making it easier to find the right product for their needs.
Amazon’s increase in AI spending this year comes as other tech companies are also spending big on AI. Recall that Google parent Alphabet said it expects to invest about $75 billion in capital expenditures this year. Last month, Microsoft said it planned to spend $80 billion in fiscal 2025 on the buildout of data centers to support AI workloads. Meta said it will spend as much as $65 billion on capital expenditures as it works to construct more data centers and computing infrastructure.
Just like the internet, AI is seen as the next big wave of technological transformation. With AI poised to reshape industries, big tech companies are showing no signs of slowing down investments. Instead, these companies are accelerating their investments, each vying for dominance in the next phase of AI-driven innovation.