Amazon has announced plans to increase its capital expenditures to $100 billion in 2025, mainly driven by investments in artificial intelligence. This represents a significant jump from last year’s spending of around $83 billion. CEO Andy Jassy had predicted this increased spending, citing the growing demand for generative AI.
The company is rapidly expanding its data centers, networking gear, and hardware to meet the surge in popularity of generative AI, following OpenAI’s release of ChatGPT in 2022. Amazon has introduced several new AI products, including Nova models, Trainium chips, a shopping chatbot, and Bedrock marketplace for third-party models.
Other tech giants are also investing heavily in AI. Google parent Alphabet is expected to spend around $75 billion on capital expenditures this year, while Microsoft plans to spend $80 billion on building data centers to support AI workloads. Meta will invest up to $65 billion on capital expenditures to construct more data center and computing infrastructure.
Amazon’s decision comes after reporting mixed results for the fourth quarter, with shares falling over 4% in extended trading. However, CEO Jassy reassured investors that the increased spending will be worthwhile in the long term, calling it a “once-in-a-lifetime type of business opportunity.”
Source: https://www.cnbc.com/2025/02/06/amazon-expects-to-spend-100-billion-on-capital-expenditures-in-2025.html