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Amazon Bets Big: $125B AI Spending Spree
2 Dec
Summary
- Amazon plans $125 billion in AI spending by end of 2025.
- AWS leads cloud market with 29% share; profit fuels growth.
- New $50 billion deal will expand AWS supercomputing for government.
The artificial intelligence race is intensifying as hyperscalers like Amazon, Meta, and Alphabet pour vast sums into infrastructure. Amazon has announced a substantial commitment, planning to spend approximately $125 billion on AI by the close of 2025 and has already secured a $50 billion deal for 2026. This strategic investment is primarily targeted at its Amazon Web Services (AWS) division, the global leader in cloud computing with a 29% market share.
AWS is a critical profit engine for Amazon, contributing 66% of its total operating income in the third quarter of 2023 from $33 billion in revenue. This robust financial performance allows for continued investment in its leading position. The company is specifically expanding its capabilities to serve government clients with classified information needs through its Top Secret, Secret, and GovCloud segments.
To support these government contracts, Amazon is investing $50 billion starting in 2026 to enhance its AI and data center capacity. This expansion includes adding 1.3 gigawatts of power and broadening access to AI tools and large language models. The goal is to provide accelerated supercomputing abilities and advanced AI services to intelligence and defense sectors.
