Amazon's $200B CapEx Spend Dominates AI Race
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What is the AI spending race and why is it important?
Welcome to the podcast. I'm your host, Jaden Schaefer. So I'm not going to lie.
How much is Amazon spending on capital expenditures for AI?
I feel like recently it feels a lot like in AI and just the industry in general, it's turned into a giant contest of who can spend the most money on data centers. I think it makes sense from a logical perspective, right?
What are the spending projections of Amazon's competitors in AI?
Basically, the more data centers you have, you have more compute and the more compute you have, your AI systems get better. And if you have a better AI system, you're ultimately going to, you know, get the most customers and you're going to be like the the king of the AI era of, you know, the tech era of AI. So I think it makes a lot of sense. And that logic though, I do think it has some limits in a lot of different industries. You know, your long-term success is still going to come down to how much money you make.
How is AWS performing amidst massive capital expenditures?
And if you're making more money than you spend. So I think right now we have this kind of interesting moment where with big tech, the compute, you know, you could call it an arms race, but it's basically everyone is spending insane amounts of money. And that's sort of what is happening dictating who's going to be the winner. So if that is the game though, I think right now Amazon is definitely in the lead. So today on the podcast, I want to break down recent earnings reports from Amazon and also want to talk a little bit about Google and Amazon and how they are spending on CapEx because it is absolutely insane. Before we get into all of that, I wanted to make a huge announcement about my own startup, which is AI Box Dot AI.
What are investors' concerns regarding AI spending by tech giants?
We just for the first time ever added a bunch of new pricing tiers, which is basically the ability for you to get more credits and in some cases for less money. So for the first time ever, we've just launched a $9 a month tier. So for $9 a month, you get access to over 40 of the top AI models, everything from Anthropic to Cohere to DeepSeek to Google to Meta, Mistral, OpenAI, Perplexity, Quen, X, tons of cool image generators like Black Forest Labs, Ideogram, and of course, 11 Labs and OpenAI's text-to-speech audio models. You get all of that for $9 a month. Instead of having $20 a month subscriptions on Anthropic and OpenAI and a dozen other platforms, you can spend nine bucks a month and get access to all of it.
We've also added a bunch of higher priced tiers. So we used to only be 20 bucks a month. We've now added a 40 and $80 tier. We had a bunch of people that were, you know, really power users doing a lot of cool stuff with audio and image. And so now you have the ability to get higher tiers if you want more tokens, more credits, especially once you start building things on the builder, automating a lot of your workflows. So there's some really exciting stuff. If you want to go check it out, get access to all of that, go check out AIbox.ai.
How does Amazon's cloud business contribute to its AI strategy?
You can now get a $9 a month tier and also $40 and $80 a month tiers for more tokens. I'll leave a link in the description to AIbox.ai. I think right now, the thing that a lot of people are talking about is Amazon when it comes to how much is getting spent on AI. They did a recent earnings report on Thursday, and they said that they expect to spend about $200 billion on CapEx through this year. So a lot of that's getting spent on AI, custom chips, robotics, and also low Earth orbit satellites. I think this is a really big increase from the $131 billion it spent last year.
What does the future of AI and tech spending look like?
So, I mean, almost, I mean, it's not quite double, but 200 billion from 131 billion, like that is a massive jump. Now, while I think it would be tempting for them and any company to give all of that to AI with just given the industry and everything that's going on right now, I think Amazon is a little bit unique among a lot of other tech companies because they also, in addition to having, you know, a big tech face, they also operate a massive physical footprint, right? A lot of that is being retrofitted for robotics and automation, which makes it a lot harder to kind of dismiss the non-AI portion of their capital budget.
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Chapters
7 chapters
1
What is the AI spending race and why is it important?
0:00–0:03
2
How much is Amazon spending on capital expenditures for AI?
0:03–0:17
3
What are the spending projections of Amazon's competitors in AI?
0:17–0:43
4
How is AWS performing amidst massive capital expenditures?
0:43–1:24
5
What are investors' concerns regarding AI spending by tech giants?
1:24–2:32
6
How does Amazon's cloud business contribute to its AI strategy?
2:32–3:08
7
What does the future of AI and tech spending look like?
3:08–12:10