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Amazon CEO Andy Jassy says the trends represented by DeepSeek should stoke AI demand long-term. (GeekWire File Photo / Taylor Soper)
Amazon reported $26.3 billion in capital expenditures in the fourth quarter, and the company plans to keep spending at that pace in 2025, which would put the total at more than $100 billion for the year.
The “vast majority” will go toward building out capacity for artificial intelligence in Amazon Web Services, said Amazon CEO Andy Jassy during the company’s earnings conference call with analysts.
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Asked about the AI cost efficiencies represented by DeepSeek’s widely followed advances, Jassy echoed the sentiments of other tech leaders in saying that he expects the trend to increase overall AI demand.
When the cost of a technology component like AI inference comes down, Jassy said, it doesn’t mean companies will spend less overall on technology. Instead, he asserted, they get excited about building new things that were previously cost-prohibitive, and end up spending more in total on technology.
“AI represents, for sure, the biggest opportunity since cloud, and probably the biggest technology shift and opportunity in business since the internet,” he said.
Amazon’s capital spending was about $78 billion for 2024. Amazon’s total capital spending also includes the buildout of its e-commerce fulfillment network and retail stores, which means it’s not directly comparable to Microsoft, Google and others.
Microsoft is spending $80 billion on capital expenditures this fiscal year, which ends in June; and Google expects to spend $75 billion for the calendar year.
For the fourth quarter, Amazon beat Wall Street’s overall expectations with $187.8 billion in net sales, up 10%. Quarterly profits surpassed $20 billion for the first time, up more than 88% from a year ago.
However, Amazon Web Services growth was slightly lower than expected, with sales of $28.8 billion, an increase of just under 19%, compared with expectations of 19.3% in advance of the report.
