Amazon To Pour Nearly $100 Billion Into AI In 2025, Surpassing Microsoft And Alphabet—Andy Jassy Says 'Cost Of Inference Will Meaningfully Come Down' Amid DeepSeek Worries

Amazon.com Inc. AMZN plans to invest about $100 billion in artificial intelligence initiatives this year, placing it ahead of its competitors.

What Happened: On Thursday, during Amazon's fourth-quarter earnings call, CEO Andy Jassy said the company's $26.3 billion spending in the last quarter of 2024 reflects its planned quarterly investments for 2025.

This amount covers all business areas, including retail. Most of the funds will go to Amazon Web Services, which runs data centers and provides software tools.

He praised DeepSeek’s emergence as a lower-cost competitor outperforming models from companies like OpenAI and predicted that lower costs and greater efficiency would drive increased customer spending.

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He said some assume that lowering the cost of a technology component, specifically inference in this case, would reduce overall spending. However, this has never been the case.

“Companies will spend a lot less per unit of infrastructure, and that is very, very useful for their businesses," Jassy stated, adding, “But then they get excited about what else they could build . . . they usually end up spending a lot more in total.”

“I believe the cost of inference will meaningfully come down,” he stated, adding that this will make it easier for companies to integrate inference and generative AI into their applications.

Why It Matters: Amazon’s fourth-quarter revenues increased by 10% year-on-year to $187.8 billion, slightly exceeding estimates. However, the company anticipates lower net sales for the current quarter.

Amazon’s aggressive AI investments align with rivals like Alphabet ($75 billion) and Microsoft ($80 billion), all vying for industry dominance.

Last month, China’s DeepSeek-R1 was made available to access on platforms like Microsoft Azure and AWS.

Price Action: Amazon’s stock dropped 4.05% in after-hours trading, settling at $229.16. Earlier on Thursday, it had closed at $238.83, marking a 1.13% gain, according to Benzinga Pro data.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.