Amazon Commits $100B to AI in 2025

# ai # GPUS # meta # Amazon

Despite the recent buzz suggesting that DeepSeek would usher in an era of reduced AI budgets, there's no indication that Big Tech is hitting the brakes. On the contrary, they're stepping on the gas. Amazon is the latest giant to reveal a hefty AI spending plan, forecasting over $100 billion in capital expenditures for 2025. CEO Andy Jassy, during Amazon's fourth-quarter earnings call on Thursday, stated that the "vast majority" of this $100 billion would be funneled into enhancing AI capabilities for its cloud division, AWS. To break it down, Jassy mentioned that the $26.3 billion spent on capex in Q4 2024 is a good indicator of what to expect annually in 2025. Multiply that quarterly figure by four, and you're looking at a whopping $105.2 billion. This is a significant leap from the $78 billion Amazon shelled out in 2024. Amazon isn't sweating over fears that cheaper AI might dent its revenue. Jassy argued that lower prices would simply boost demand for AI, and with AWS's extensive AI offerings, they're poised to reap the benefits. “Sometimes people make the assumption that if you’re able to decrease the cost of any type of technology component … that somehow it leads to less total spend in technology. We’ve never seen that to be the case,” Jassy remarked, drawing parallels between the surge in AI demand and the early days of the internet and cloud. Other tech behemoths are echoing this sentiment during this earnings season, as concerns about the ROI on their soaring AI costs grow. Last week, Meta CEO Mark Zuckerberg announced the company's long-term plan to invest "hundreds of billions" in AI, driven by increasing inference demand across its vast user base. Meta is set to spend at least $60 billion on capex in 2025, with most of it earmarked for AI. Alphabet, meanwhile, has upped its 2025 capex by a staggering 42% to $75 billion. CEO Sundar Pichai justified this by saying that lower AI costs "will make more use cases feasible." And Microsoft revealed last month that it would pour $80 billion into AI data centers in 2025 alone. Microsoft CEO Satya Nadella even chimed in on Twitter with the Wikipedia page for Jevons Paradox (the economic theory that lower prices lead to increased demand) right as the DeepSeek discussion was heating up. > Jevons paradox strikes again! As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can't get enough of. https://t.co/omEcOPhdIz > > — Satya Nadella (@satyanadella) January 27, 2025 Whether Jevons Paradox will hold true for Big Tech this time around is yet to be seen. But for now, there's no sign of any AI spending slowdown. *TechCrunch has an AI-focused newsletter! Sign up here to get it in your inbox every Wednesday.*

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