Seattle’s tech giant Amazon has splashed $100 billion into artificial intelligence to supercharge its cloud computing wing, Amazon Web Services (AWS).
The man at the helm, Andy Jassy, is practically bouncing with excitement, claiming AI is the coolest thing to hit the tech world since the internet started serving up viral goat videos.
Jassy, probably fuelled by a bucket-sized coffee, admitted that chasing AI glory might be trickier than herding cats in a thunderstorm. The company’s latest earnings report was a pleasant surprise, beating expectations for the last quarter.
Yet, the stock took a 4% nosedive faster than you can say “add to cart” after Amazon dropped a first-quarter forecast that left Wall Street scratching its collective head like a confused uncle at a tech fair.
The real drama’s brewing in Amazon’s cloud corner. Everyone and their dog wants AI, but Amazon’s struggling to keep up, like a chai stall running out of cups on a rainy day.
Building data centres and nabbing fancy chips isn’t happening at lightning speed. “We’re growing faster than weeds in monsoon, but we can’t water them quick enough,” Jassy quipped during an earnings call, pointing fingers at supply chain woes slowing AWS’s grand AI dreams.
Last quarter, they splashed out $26.3 billion on gear and stuff, a figure Jassy says will stick around like that one relative who overstays after Diwali.
Just when you thought it couldn’t get spicier, a Chinese startup named DeepSeek barged into the scene, whipping up cheap yet powerful AI language models.
It’s got folks wondering if it’ll steal the thunder from Amazon’s buddies like Anthropic and OpenAI. Investors are sweating like they’re stuck in a Delhi summer, worried that budget AI might shrink cloud spending. Jassy, though, just grinned like a kid with a secret.
“Cheaper AI? That’s like a BOGO deal at the bazaar, more folks will pile in,” he said, betting it’ll boost demand, not bust budgets.
To prove he’s not just talking big, Amazon’s already tossing DeepSeek’s models onto AWS, letting businesses dip into affordable AI without leaving the Amazon party. Genius or a wild punt? We’ll see.
Analysts aren’t losing their cool yet. Even with the stock dip, Brad Erickson from RBC Capital Markets is waving pom-poms, bumping his price target to $265 from $255, calling AWS’s AI push a “golden goose waiting to hatch.”
Over at William Blair, Dylan Carden and Arjun Bhatia are on the same vibe, saying cheap AI will reel in more companies like fish to a juicy bait. “It’s like handing out free samosas, get them hooked now, cash in later,” Carden chuckled, probably munching one himself.
Amazon’s not alone in this AI rollercoaster. Rivals Microsoft and Google are also juggling chip shortages and data centre headaches. Still, AWS is racking up “triple-digit” AI revenue growth, a stat Jassy flaunted like a proud uncle showing off his nephew’s report card.
If the supply chain gods play nice later this year, that growth could zoom faster than a rickshaw in rush hour.
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