The tech giants are all making huge investments to build up their AI computing capabilities, money that the companies insist will be justified by increasing adoption of AI tools and applications by customers across the globe.
While the company did not break out its specific investment in AI capabilities, Amazon said it increased year-on-year purchases of property and equipment by US$50.9b, which is a massive jump in spending.
Amazon also said it added 3.8 gigawatts of power capacity over the past year to support AI infrastructure – more than any other cloud provider – and launched a massive computing cluster with nearly 500,000 custom AI chips.
AI computing demands enormous amounts of electricity, far more than traditional computing, and can put a strain on local resources, notably water supplies needed for cooling data centre activity.
Operating income, however, remained flat at US$17.4b after Amazon took two major charges: US$2.5b for a legal settlement with the Federal Trade Commission (FTC) and US$1.8b in severance costs tied to planned job cuts.
Amazon said this week that it was reducing its workforce by 14,000 posts to streamline operations as it invests in artificial intelligence.
The cuts are expected to target areas such as human resources, advertising, and management in a group that has 350,000 office positions, out of a total of more than 1.5 million employees.
The settlement with the FTC was over long-running allegations from the United States regulator that it used deceptive practices to enrol consumers in Amazon Prime and made it difficult to cancel subscriptions.
The online retail giant, which admitted no wrongdoing in the settlement, paid US$1.5b into a consumer fund for refunds and US$1b in civil penalties.
Shortly after the results landed, Amazon’s share price was up by 11% in after-hours trading.
– Agence France-Presse
