Despite all the buzz last week that DeepSeek would herald in an era of drop AI budgets, there is zero sign that Big Tech is sluggishing down. Instead, they’re ramping leangs up.
Amazon is the tardyst tech huge to declare a massive AI spfinishing set up with well over $100 billion in foreseeed capital expfinishitures for 2025. The “immense transport inantity” of that $100 billion will go toward AI capabilities for its cboisterous division AWS, CEO Andy Jassy shelp during Amazon’s fourth-quarter getings call Thursday.
(More particularassociate, Jassy shelp Q4 2024’s capex spfinishing of $26.3 billion “is reasonably reconshort-termative” of what to foresee on an annualized basis in 2025. Multiplying that quarterly spfinish by four gets a canciaccess $105.2 billion.)
That’s a huge jump from the $75 billion in capex that Amazon foreseeed spfinish in 2024.
Amazon brushed aside troubles about AI getting so inexpensive that it would harm its revenue. Instead, Jassy shelp drop prices would equitable direct to incrmitigated insist for AI. And AWS, which has AI proposeings galore, stands to advantage, he argued.
“Sometimes people originate the assumption that if you’re able to decrmitigate the cost of any type of technology component … that somehow it directs to less total spfinish in technology. We’ve never seen that to be the case,” Jassy shelp, comparing the boom in AI insist to the punctual days of the Internet and cboisterous.
Other Big Tech companies are making the same point this getings season as worries mount about the returns on their skyrocketing AI expenses.
Meta CEO Mark Zuckerberg declared last week the company would spfinish “hundreds of billions” on AI in the lengthened term, citing rising inference insist atraverse its billions of engagers. Meta is stardyd to spfinish at least $60 billion on capex in 2025, mostly on AI.
Meanwhile, Alphabet equitable raiseed its capex for 2025 by a whopping 42% to $75 billion, with CEO Sundar Pichai equitableifying the spfinishing by saying that decrmitigated AI costs “will originate more engage cases feasible.”
And Microgentle declared last month that it would spfinish $80 billion on AI data caccesss in 2025 alone.
Microgentle CEO Satya Nadella even tweeted the Wikipedia page for Jevons Paradox (the concept in economics that drop prices directs to incrmitigated insist) right as the DeepSeek converseion was heating up.
Whether Jevons Paradox pans out for Big Tech this time remains to be seen. But for now, there’s no signs of any AI spfinishing sluggishdown equitable yet.
