Amazon to boost AWS capacity with $100B investment – CIO Dive

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The company will keep fueling infrastructure spend to support AI and cloud, amid what CEO Andy Jassy described as a “once-in-a-lifetime” opportunity.
As generative AI boosted cloud consumption, the big three cloud providers mounted a rapid response. AWS, Microsoft and Google Cloud doubled down on infrastructure, pouring tens of billions of dollars into building the capacity needed to train AI models and satisfy enterprise demand throughout in 2024.
AWS ramped up capital spending throughout the year and the vendor’s two primary cloud competitors followed suit. Microsoft CapEx grew to $22.6 billion during the final three months of last year and Google Cloud spent $14 billion in Q4.
Despite posting capital investments that neared cloud revenues for the quarter, Amazon didn’t blink Thursday. Instead, Jassy doubled down on AWS’ buildout strategy, noting that revenues would have been higher if not for cloud capacity constraints.
“It is hard to complain when you have a multibillion-dollar annualized revenue run rate business in AI like we do, and it’s growing triple-digit percentage year over year,” Jassy said. “However, it is true that we could be growing faster, if not for some of the constraints on capacity.”
In addition to building out cloud infrastructure, Amazon expanded its partnership with generative AI model maker Anthropic in November, doubling its investment in the company to $8 billion. The company also unveiled its Nova multimodal LLM family and expanded an alliance with PwC around industry-tailored generative AI solutions as the year came to a close.
Jassy touted practical applications of AWS’ suite of AI models, pointing to Amazon Q capabilities designed to help enterprises migrate applications from Windows to Linux, shift workloads from VMware to cloud and ease migration to cloud from mainframe.
“While AI continues to be a compelling new driver in the business, we haven’t lost our focus on core modernization of companies’ technology infrastructure from on premises to the cloud,” Jassy said.
AWS expects capacity constraints to ease in the second half of the year but there are big hurdles to overcome.
“The world is still constrained on power,” Jassy said. “There are some components in the supply chain, like motherboards, too, that are a little bit short in supply for various types of servers. I think the team has done a really good job scrapping and providing capacity for our customers.”
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As vendors fuel a sense of urgency on AI adoption, CIOs turn to risk mitigation frameworks to clear the smoke.
Alphabet CEO Sundar Pichai said underinvesting in the technology is a larger risk than overinvesting, as vendors pour resources into developing chips, models and infrastructure. 
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