The AI Spending Spree Is Just Getting Started

There's stepping on the gas, and then there's flooring it. When it comes to investing in artificial intelligence, Amazon.​com just did the latter.

- Dan Gallagher

While reporting its fourth-quarter results Thursday afternoon, Amazon became the latest tech giant to project a major jump in capital spending for this year-even after a big surge last year. Amazon didn't give a precise forecast but said the $26.3 billion of capital spending in the latest quarter was a run rate that will be "reasonably representative" of what the company will spend this year.

That would equate to about $105 billion for the year, up 35% from last year's total and far above the $86 billion analysts were expecting, according to consensus estimates from Visible Alpha. And because Amazon defines its capital spending as cash expenditures and equipment acquired under finance leases, net of proceeds from the sale of property and equipment, the actual money flowing out the door will likely be higher. Purchases of property and equipment from the company's cash flow statement-the traditional definition of capex-totaled $27.8 billion in the fourth quarter.