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(Bloomberg) – Amazon.com Inc. Investors warned that it could be confronted with capacity restrictions in its cloud computing division, despite plans to invest around $ 100 billion this year, with the majority of the money going to data centers, chips and other equipment in their own soil to offer Artificial intelligence services.
Most of them read from Bloomberg
Chief Executive Officer Andy Jassy, determined for Amazon to become an AI-Supermarkt, spends great to keep the company’s lead in Cloud-Computer services. Nevertheless, he warned that the growth would be “lumpy” and hinted that Amazon could be confronted with capacity problems with regard to delays in getting hardware and not having sufficient electricity.
“It is true that we could grow faster, were it not for some of the restrictions on capacity,” Jassy said on Thursday during a conference call after the release of the results of the fourth quarter.
The worries reflect that of rival Microsoft Corp., which last week said that the reversal growth of the cloud was injured because it did not have enough data centers to treat the demand for his AI products.
Jassy said that the delivery of chips – from third parties and Amazon’s own chip design unit – and the power capacity limit the ability of Amazon Web Services to bring new data centers online. Those limitations will probably relieve in the second half of 2025, he said.
Amazon spent $ 26.3 billion in capital spending in the last three months of 2024, the vast majority of which went to AI-related projects within AWS. Jassy told analysts about the call that the amount was “reasonably representative” of the rates of expenses that the company wanted to make in 2025.
The company reported that the AWS turnover increased by 19% to $ 28.8 billion in the quarter of December 31. It was the third consecutive period of 19% growth for the cloud unit. The business income generated by the unit were $ 10.6 billion, which exceeds the average projection of $ 10.1 billion.
“AWS growth did not accelerate as expected and instead corresponded to Q3 levels, indicating that the company is challenged by the same types of capacity restrictions that Rivals Google and Microsoft are confronted,” said Sky Canaves, an analyst at Emarketer.
The warning from Jassy on AWS growth meters overshadowed a fairly strong holiday quarter, suggesting that the most important e-commerce and logistics activities of the company defend the competition from Walmart Inc. And a discount on starts such as Temu and Shein.
