From the Straits Times, February 7:
Amazon.com warned investors that it could face capacity constraints in its cloud computing division despite plans to invest some US$100 billion (S$135 billion) in 2025, with most of the money going towards data centres, home-grown chips and other equipment to provide artificial intelligence services.
Chief executive Andy Jassy, determined for Amazon to become an AI supermarket, is spending big to retain the company’s edge in cloud computing services.
Still, he warned growth would be “lumpy” and hinted Amazon could face capacity issues related to delays in getting hardware and not having sufficient electricity.
“It is true we could be growing faster were it not for some of the constraints on capacity,” Mr Jassy said on a Feb 6 conference call after the release of fourth-quarter results.
The concerns echo those of rival Microsoft, which last week said its cloud sales growth was hurt because it did not have enough data centres to handle demand for its AI products.
Mr Jassy said the supply of chips – from third parties and Amazon’s own chip design unit – and power capacity are limiting the ability of Amazon Web Services (AWS) to bring new data centres online.
Those constraints will likely ease in the second half of 2025, he said.
Amazon spent US$26.3 billion in capital expenditures in the last three months of 2024, the vast majority of which went towards AI-related projects within AWS.
Mr Jassy told analysts on the call that the amount was “reasonably representative” of the rate of outlays the company planned to make in 2025.
The company reported that AWS revenue jumped 19 per cent to US$28.8 billion in the quarter ended Dec 31....
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