Amazon has announced plans to significantly increase its capital expenditures in 2025, with a strong focus on artificial intelligence (AI) and cloud computing infrastructure. The company projects an annual expenditure of approximately $105 billion, marking a 35% increase from 2024. This move aligns Amazon with other tech giants like Alphabet, Meta, and Microsoft, who have also unveiled substantial capital investment plans for the year.
This surge in spending comes in the wake of recent developments by Chinese AI startup DeepSeek, which claimed breakthroughs in reducing AI model training costs. DeepSeek’s advancements initially caused a market selloff, raising concerns about the future of AI investments. However, Amazon CEO Andy Jassy dismissed the notion that lower component costs would lead to reduced overall technology spending, emphasizing the company’s commitment to AI and cloud services.
While these investments are expected to benefit AI chip designers like Nvidia, they have also raised concerns among investors about the potential returns. Following the announcement, Amazon’s shares experienced a 4% decline. Despite this, Amazon remains optimistic, projecting significant future growth for its AWS cloud computing business, driven by robust demand signals.