Amazon is predicting more than $100 billion in capital expenditure for AI in 2025. The majority of that will be invested in the AWS cloud division, according to Amazon President and CEO Andy Jassy, indicating Big Tech is not planning to back down on AI. Amazon’s Q4 profit hit $20 billion, an 88 percent increase over the same period in 2023, and full year profit was $59.2 billion, a 94 percent increase, on revenue of $638 billion, an 11 percent rise. On an earnings call, Jassy said the $26.3 billion in Q4 2024 capex spending “is reasonably representative” of what the company can be expected to spend on an annualized basis this year.

“Amazon brushed aside concerns about AI getting so cheap that it would harm its revenue,” TechCrunch reports, adding “Jassy said lower prices would just lead to increased demand for AI. And AWS, which has AI offerings galore, stands to benefit.”

It’s wrong to assume that if you’re able to decrease the cost of a technology component, in this case inference, that it’s going to lead to lower technology spending overall, Jassy said, reminding analysts that when AWS was launched in 2006 object storage was 15 cents per GB, and compute 10 cents an hour, “which of course is much lower now.”

In announcing its Q4 and full year 2024 results, Amazon touted the launch of its Nova line of generative models as “lower priced,” and at the other end of the spectrum its Project Rainier collaboration with Anthropic to build the world’s largest AI compute cluster.

“Despite all the buzz last week that DeepSeek would herald in an era of lower AI budgets, there is zero sign that Big Tech is slowing down. Instead, they’re ramping things up,” TechCrunch notes.

The article cites Meta’s plans to spend “at least $60 billion on capex in 2025, mostly on AI,” the fact that “Alphabet just boosted its capex for 2025 by a whopping 42 percent to $75 billion, with CEO Sundar Pichai justifying the spending by saying that decreased AI costs ‘will make more use cases feasible,’” and a recent Microsoft forecast of $80 billion in AI data center spending in 2025.

The New York Times says that Amazon’s cloud computing growth of 19 percent (to $28.8 billion) in Q4 and 17 percent (to $107.5 billion) for 2024 are “a sign that Amazon’s investments in artificial intelligence were paying off,” noting that AWS 2024 profit for Q4 was $10.6 billion, “which accounted for half of Amazon’s overall operating profit.”

“Jassy said Amazon could have sold more cloud computing if it had more data center capacity, especially chips for AI,” adds NYT.