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Amazon allocates unprecedented $100B for AI

According to Amazon CEO Andy Jassy, “the vast majority” of the $100 billion capital expenditure will be directed toward developing AI capabilities for the AWS cloud division. The forecast is based on fourth-quarter 2024 spending of $26.3 billion, which annualizes to $105.2 billion – a significant increase from $78 billion in 2024.

Technology leaders reject concerns that AI cost reduction could harm their revenues. “We’ve never seen a reduction in the cost of a technology component lead to a decrease in overall technology spending,” Jassy noted, comparing the current AI boom to the early days of internet and cloud technologies.

Microsoft CEO Satya Nadella supported this position, citing Jevons paradox – an economic concept suggesting that price reductions lead to increased demand. Technology giants are confident that reducing AI costs will enable its application in new use cases, leading to overall market growth.

Major technology companies are also increasing AI investments:

  • Meta plans to spend “hundreds of billions” long-term, with at least $60 billion in 2025.
  • Alphabet is increasing capital expenditure by 42% to $75 billion.
  • Microsoft is investing $80 billion in AI data centers alone.
Autor: AIvengo
For 5 years I have been working with machine learning and artificial intelligence. And this field never ceases to amaze, inspire and interest me.

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