Amazon has joined Microsoft, Meta, and Google in committing to massive capital expenditures on AI data centers, totaling approximately $280 billion by 2025.
Amazon's fourth-quarter earnings call revealed a $26.3 billion capital expenditure, primarily for AI within its Amazon Web Services business. The company anticipates maintaining this spending level through 2025.
The announcement follows similar commitments from Microsoft ($80 billion), Meta ($60-$65 billion), and Google ($75 billion). These investments are driven by the increasing demand for cloud computing services, with all three companies reporting insufficient capacity to meet customer needs.
Nvidia is expected to be a major beneficiary of this spending, as its AI chips are widely used in data centers. While Nvidia's stock has recovered somewhat from its recent decline, investors remain concerned about the potential for hyperscalers to adopt lower-cost AI solutions.
Amazon's CEO, Andy Jassy, acknowledged the industry's focus on reducing computing costs, citing DeepSeek's use of older Nvidia GPUs as an example. However, he emphasized that Nvidia would still benefit, as the cost of AI inference is expected to decrease significantly.
Other chipmakers likely to benefit from the AI spending include Broadcom, Marvell Technology, and Advanced Micro Devices, although AMD's recent pause in forecasting separate revenue for its MI300 AI chip line has raised some concerns.
The spending plans will also positively impact computer hardware companies like Dell Technologies, Super Micro Computer, and Hewlett Packard Enterprise, although their profit margins are typically thin.