Amazon, built by retail, invests in its AI future
Amazon built a $2 trillion company through years of aggressive spending on its retail and logistics businesses. Its future gains will likely be determined by the billions designated to fund its artificial-intelligence push. Amazon is planning to spend more than $100 billion over the next decade on data centers, an impressive level of investment even for a company known for its spending ways.
The Seattle company is now devoting more investment money to its cloud computing and AI infrastructure than to its sprawling network of e-commerce warehouses. Amazon Web Services, the arm that manages Amazon’s cloud business, has opened data centers for years, but executives said there is a surge in investment now to meet demand triggered by the excitement around AI. “We have to dive in.
We have to figure it out," said John Felton, who took over as AWS’s chief financial officer this year after spending most of his career in Amazon’s retail fulfillment operations. The company’s financial commitment reflects the importance and high costs of AI. Felton said building for AI today feels like building that massive delivery network in years past.
“It’s a little uncertain," he said. AWS is expanding in Virginia, Ohio and elsewhere. The company’s overall capital expenditures decreased last year primarily because it reined in fulfillment and transportation spending, but the share of that spending on infrastructure mostly for AWS has surged.
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