Despite all the talk of last week, there are zero signs that Big Tech is slowing down despite the fact that Deepseek will accused him in an era of AI budget declines. Instead, they’re strengthening things.
Amazon is the latest tech giant to announce a massive AI spending plan with forecasted capital expenditures for 2025 well over $100 billion. That $100 billion “majority” will be directed towards the AI capabilities of the cloud sector AWS, CEO Andy Jassy said. Thursday during Amazon’s fourth quarter revenue.
(More specifically, Jassy said it was “reasonably representative” of CAPEX spending for the fourth quarter of 2025. What we expect in 2025 on an annual basis is that quarter quadruple the spending per unit to increase $105.2 billion.)
This is a big jump from the $78 billion Capex that Amazon spent in 2024.
Amazon has put aside concerns that AI is getting cheaper enough to damage revenue. Instead, Jassy said that low prices alone will lead to increased demand for AI. And he argued that AWS, which has a wealth of AI offerings, could benefit.
“People may assume that if they can reduce the costs of any type of technology component, it somehow leads to total spending on technology. Jassy said that the boom in AI demand was the internet and the cloud early on. Compared to the times, I never saw it as a fact.
Other big tech companies have earned the same points they worry about the return on surge in AI costs.
Meta CEO Mark Zuckerberg last week declared the company would spend “hundreds of millions of people” on AI in the long term, saying demand for inference is rising across billions of users. Meta plans to spend at least $60 billion on CAPEX in 2025.
Meanwhile, Alphabet raised CAPEX from a whopping 42% to $75 billion in 2025. CEO Sundar Pichai justifies spending by stating that AI costs will “make more use cases possible.”
Microsoft also announced last month that it would spend $80 billion on AI data centers in 2025 alone.
Microsoft CEO Satya Nadella tweeted the Wikipedia page for Jevons Paradox (an economics concept that lower prices leads to increased demand) as Deepseek’s debate is intensifying.
It remains to be seen whether Jevons Paradox will pan out for Big Tech this time. But for now, there are no signs of slowing down AI spending.
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