Amazon CEO Andy Jassy has warned investors that their cloud computing segment could struggle with capacity building due to constraints with obtaining hardware for infrastructure and the electricity to power data centers. The company posted their quarterly earnings report last week showing a slowdown in revenue growth for their cloud computing business.
“It is true that we could be growing faster, if not for some of the constraints on capacity,” Jassy said during the earnings call with analysts.
Despite this, Jassy called AI a “once-in-a-lifetime type of business opportunity,” saying the business is expected to eventually generate “multi-billion dollars” annually in sales. He also stated that these constraints would “relax” towards the end of the year.
The online retail giant will be spending around $105 billion in capital expenditure this year with spending mostly focused on AI data centers. The company spent a record $26.3 billion during the fourth-quarter.
As Big Tech pushes capex around AI, Big Tech companies like Microsoft, Amazon and Google parent-Alphabet have posted disappointing results for their cloud revenues respectively.
A few days ago, Microsoft CFO Amy Hood also admitted that the company was in a “pretty restrained capacity place” for Azure cloud services.
Published - February 10, 2025 12:43 pm IST
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