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Tech Giants Chase AI Gold; WaPo Flees Silicon Valley

Tech Giants Amazon and Reddit Focus on AI as Key Growth Driver

Amazon and Reddit both highlighted the importance of artificial intelligence (AI) as a significant driver for future growth and revenue during their respective fourth-quarter earnings calls on Thursday. Amazon Web Services (AWS) reported strong revenue growth, fueled by increasing demand for cloud services and AI capabilities, while Reddit announced its plans to integrate and monetize AI-powered search.

AWS ended 2025 with a substantial $35.6 billion in revenue for the fourth quarter, marking a 24% year-over-year increase, according to Amazon. This represented the cloud service's largest growth rate in 13 quarters. The annual revenue run rate for AWS is now $142 billion. Operating income for AWS also increased, rising from $10.6 billion in the fourth quarter of 2024 to $12.5 billion in the same period of 2025. Amazon CEO Andy Jassy emphasized the significance of this growth, stating, "It's very different having 24% year-over-year growth on a $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors."

Amazon is also heavily investing in AI infrastructure. The company projected $200 billion in capital expenditures throughout 2026, allocated to AI, chips, robotics, and low earth orbit satellites. This is a significant increase from the $131.8 billion in capital expenditures in 2025.

Reddit also sees AI as a major opportunity. The company suggested its AI-powered search engine could significantly impact its bottom line, both as a product and as a revenue driver. Reddit CEO Steve Huffman said the company plans to merge traditional and AI search, hinting at the enormous market potential. "There's a type of query we're, I think, particularly good at – I would argue, the best on the internet – which is questions that have no answers, where the answer actually is multiple perspectives from lots of people," Huffman stated, suggesting that generative AI search will be superior for many queries.

The focus on AI comes as the tech industry witnesses a surge in AI-related investments. Some venture capitalists are looking for startups to achieve $100 million in annual recurring revenue (ARR) before Series A funding. However, Andreessen Horowitz general partner Jennifer Li cautioned against fixating solely on ARR, stating that "not all ARR is created equal, and not all growth is equal either."

The increased investment in AI by tech giants like Amazon highlights the growing importance of data centers and computing power in the AI race. As companies compete to build the best AI products, substantial capital expenditures are expected to continue.

AI-Assisted Journalism

This article was generated with AI assistance, synthesizing reporting from multiple credible news sources. Our editorial team reviews AI-generated content for accuracy.

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