Even after the rise of DeepSeek, a Chinese startup that developed cutting-edge AI for less than $6 million compared to Anthropic’s $100 million, Amazon is not cutting back on its plans for AI spending. Instead of downsizing its AI expenditures, the e-commerce giant is projecting to spend more than ever.
On Amazon’s fourth quarter 2024 earnings call on Thursday, CEO Andy Jassy stated that the company’s $26.3 billion in capital spending for the quarter was “reasonably representative” of what Amazon will spend in each quarter of 2025.
“The vast majority” of that spend “is on AI,” Jassy said. “We think virtually every application that we know of today is going to be reinvented with AI inside of it.”
Related: DeepSeek AI Cost Less Than $6 Million to Develop. Here’s Why Meta and Microsoft Are Justifying Spending Billions.
That means that Amazon will spend approximately $105 billion this year on capital spending, most of which will go towards AI-related expenses like advancing its own AI chips. According to the Wall Street Journal, Amazon’s forecasted spending in 2025 is 35% higher than 2024 and well above the $86 billion analysts expected.
Amazon CEO Andy Jassy. Photographer: David Paul Morris/Bloomberg via Getty Images
While Amazon’s expenditures are going up, so is its revenue.
Amazon’s quarterly earnings report was its best yet after a successful holiday shopping season, with revenue of $187.8 billion. Amazon’s fourth-quarter report positions it to overtake Walmart as the company generating the most revenue on the S&P 500.
How does Amazon compare to Google, Meta, and Microsoft in AI spending?
The tech giants have all recently announced their AI-spending plans. Microsoft stated it would spend $80 billion on AI infrastructure in the fiscal year ending in June while Google’s parent company Alphabet said it would be spending $75 billion. Meta informed investors on its most recent earnings call that it would spend $60 billion to $65 billion on AI this year.
The spending goes towards infrastructure like AI data centers. Microsoft’s chief financial officer Amy Hood said on the company’s latest earnings call that Microsoft’s focus was on “long-lived assets that will support monetization over the next 15 years and beyond.”
Collectively, Microsoft, Alphabet, and Meta project spending at least $215 billion over their current fiscal years, a 45% yearly increase per the WSJ.
Amazon is still on track to be the biggest AI spender of the bunch with its $105 billion prediction.
Related: Microsoft Is on Track to Hit a Major Milestone, the ‘Fastest Business in Our History,’ According to Its CEO
