Despite reports last week from DeepSeek about budget cuts in the field of artificial intelligence, Big Tech companies continue to increase their investments in this area. Amazon is one of these companies. The company plans to invest over $100 billion in AI for 2025. Amazon's CEO Andy Jassy revealed that a large portion of this investment will be dedicated to the AI capabilities of AWS (Amazon Web Services).
Jassy emphasized that the $26.3 billion capital expenditures in Q4 of 2024 will continue into 2025, reaching an estimated annual total of $105.2 billion. This amount is significantly higher than Amazon's $78 billion investment in 2024.
Amazon has stated that the decrease in AI prices will not negatively affect its revenues. On the contrary, Jassy noted that the reduction in AI prices will lead to increased demand, and AWS will benefit from this demand. He believes that if technology becomes cheaper, it will not lead to an overall decrease in spending on technology. He even compared this situation to the early days of the internet and cloud technologies.
Other major tech companies have also pointed out in their financial reports this year that the further reduction in AI prices will increase demand. Meta's CEO, Mark Zuckerberg, revealed last week that the company will invest "hundreds of billions" of dollars in AI over the long term. Meta plans to invest $60 billion in 2025.
Alphabet will increase its capital expenditures by 42% in 2025, reaching $75 billion. The company's CEO, Sundar Pichai, mentioned that the reduction in AI prices will create new opportunities for usage.
Microsoft, on the other hand, has announced it will invest $80 billion in AI data centers for 2025. The company's CEO, Satya Nadella, highlighted that the decrease in AI prices will lead to higher demand, referencing Jevons' Paradox (when prices fall, demand increases).
Currently, major tech companies are continuing to invest more in the AI field, and there are no signs of a slowdown in this area.
