Amazon, the e-commerce and cloud computing giant, is making unprecedented efforts to build up artificial intelligence. According to the latest financial report, Amazon expects its capital expenditures to grow by more than 50% this year and plans to invest about $200 billion in AI infrastructure by 2026. This move indicates that Amazon has positioned computing power as its top strategic priority to support future growth, ensuring that Amazon Web Services (AWS) maintains its leading position in the competitive cloud market.

CEO Andy Jassy clearly stated at the earnings call that despite the huge spending, it is a necessary investment to maintain the company's long-term competitiveness. Currently, AWS remains Amazon's "profit engine," with fourth-quarter revenue reaching $35.6 billion, contributing to more than 60% of the company's operating profit. To further explore the commercial value of AI, AWS has recently launched over 1,000 new applications and has deeply integrated into practical scenarios such as customer service, advertising automation, and content distribution.

In addition to the aggressive expansion of cloud services, Amazon has also shown a strategy of "using AI to gain efficiency" in retail and advertising. The company is using AI tools to provide automated creative generation solutions for Prime Video advertisers, driving a 22% increase in fourth-quarter ad revenue to $21.3 billion. At the same time, Amazon is rigorously adjusting its offline footprint, recording impairment charges of about $610 million for stores like Amazon Fresh, and plans to integrate them into the Whole Foods system to optimize its heavy asset layout.

Although the company continues to optimize its personnel structure, cutting about 14,000 corporate employees this quarter, Amazon's hiring in the fields of AI and cloud computing has not stopped. Market analysts believe that with the combined capital expenditures of Amazon, Microsoft, Google, and Meta expected to exceed $630 billion this year, a global "arms race" around AI infrastructure has entered a feverish stage.

Key Points:

  • 💰 Heavy Investment in Computing Power: Amazon plans to invest $200 billion in AI infrastructure by 2026, with capital expenditure growth ranking among the highest in the industry.

  • 📈 Stable Core Profit Position: AWS contributes more than 60% of the company's profits with less than 20% of its revenue and is accelerating monetization through over 1,000 new AI applications.

  • 🔄 Adjustment of Business Focus: The company achieves strong growth by empowering the advertising business with AI while scaling back underperforming offline stores, transitioning towards a lighter asset structure and higher efficiency.