AWS will spend $100 billion on data centers and related infrastructure in 2025, topping Microsoft’s $80 billion and Alphabet’s $75 billion as Amazon CEO Andy Jassy cranks up the stakes for leadership in the “once in a lifetime” AI opportunity.
Those astonishing numbers represent a level of investment the world has never seen from any industry, and underscore the near-limitless confidence that business leaders are placing in AI to drive unprecedented innovation and growth.
They also stand in sharp juxtaposition to the much-discussed findings from a company that, just two weeks ago, few people in the entire world had ever heard of — DeepSeek — and whose research raised some questions about whether these staggeringly large investments were the best approach to AI development.
For AWS, its pledge to pour $100 billion into data centers and related infrastructure this year comes as AWS stands out from its major competitors for yet another significant reason: It was the only one of the three original hyperscalers to maintain the growth rate it posted in Q3 into Q4.
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While Microsoft’s Q4 growth rate of 21% was down from Q3’s 22% and Google Cloud’s slipped to 30% from 35%, AWS maintained a 19% growth rate, with Q4 revenue coming in at $28.8 billion.
As I’ve noted many times, my focus on growth rates here at Cloud Wars stems from my belief that they are the best indicators of customer demand in a marketplace jammed with world-class competitors. Against such capable rivals, which vendor is able to distinguish itself by grabbing greater levels of interest, investment, and commitment from customers equipped with so many appealing alternatives?
And while Jassy certainly used his company’s Q4 earnings call to showcase AI as a huge factor behind that growth, he cited additional reasons behind AWS’s strong Q4 performance, including customers moving more workloads to the cloud and also either restarting or even accelerating their ongoing moves of on-prem systems to the cloud.
But from Jassy’s opening remarks on the call as well as his comments during Q&A, it was unmistakably clear that AI is the primary driver of the AWS agenda for the next several years.
“Although we expect growth will be lumpy over the next few years as enterprise adoption cycles, capacity considerations, and technology advancements impact timing, it’s hard to overstate how optimistic we are about what lies ahead for AWS customers and for our business,” Jassy said.
“I spend a fair bit of time thinking several years out. And while it may be hard for some to fathom a world where virtually every app has generative AI infused in it, and where inference becomes a core building block just like compute, storage, and database, and where most companies will have their own agents that accomplish various tasks and interact with one another, this is the world we’re thinking about all the time.”
And why not? Jassy said the onset of accessible AI represents one of the biggest and most significant developments the business world has ever experienced.
“So when AWS is expanding its CapEx, particularly in what we think is one of these once-in-a-lifetime type of business opportunities like AI represents, I think it’s actually quite a good sign in the medium to long term for the AWS business,” Jassy said.
“We think virtually every application that we know of today is going to be reinvented with AI inside of it and with inference being a core building block, just like compute and storage and database.
“So if you believe that, plus that altogether new experiences that we’ve only dreamed about are going to actually be available to us with AI, then AI for sure represents the biggest opportunity since cloud and probably the biggest technology shift and opportunity in business since the Internet.”
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