Amazon ups the ante with $200 billion investment in AI

Amazon’s recently announced $200 billion investment in building a robust AI infrastructure, including data centers and chips, will determine the next decade of its leadership, especially given Google’s recent comeback in AI.

Amazon CEO Andy Jassy said the tech giant will invest in capital expenditures across Amazon.com, but predominantly in its cloud computing division AWS, because of “very high demand.”

“Customers really want AWS for core and AI workloads,” Jassy said on the company’s latest earnings call. “And we are monetizing capacity as fast as we can install it. We have deep experience understanding demand signals in the AWS business and then turning that capacity into strong return on invested capital. We are confident this will be the case here as well.”

Amazon will put a big chunk of that money toward AWS, which grew 20% YoY to $128.7 billion in the fourth quarter. “What we are continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it,” Amazon CFO Brian T. Olsavsky said. “So it’s just a very unusual opportunity.”

The Seattle-based tech giant has also struck AWS deals with AI companies including OpenAI and Perplexity.

“With AI, there are going to be a whole bunch of customer experience none of us ever imagined that are going to become the norms of how we all operate every day and what we use,” Olsavsky said, addressing the massive capital expenditure toward AI. “I think the other thing is that if you really want to use AI in an expansive way, you need your data in the cloud and you need your application in the cloud.”

Overall, Jassy said, AI presents an “extraordinarily unusual opportunity to forever change the size of AWS and Amazon.com as a whole.”

“I think it also is an extraordinary opportunity for companies to change all their customer experiences and for startups to be able to build brand-new experiences of businesses that would have taken much longer to accomplish before that they can do right now,” he added.