Amazon Web Services (AWS) reported strong revenue growth at the close of 2025, while other tech companies are making significant investments in AI. Reddit is eyeing AI-powered search as a potential revenue driver, and startups are emerging to address the backend infrastructure needs of AI application development.
AWS ended 2025 with a revenue of $35.6 billion in the fourth quarter, marking a 24% year-over-year increase, according to Amazon. This was the cloud service business's strongest quarterly growth rate in more than three years. The annual revenue run rate for AWS is $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 in 2025. Amazon CEO Andy Jassy noted the significance of this growth, stating it was "very different having 24% year-over-year growth on $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors."
The surge in AWS revenue comes as Amazon and other tech giants are heavily investing in AI infrastructure. Amazon announced it projects $200 billion in capital expenditures throughout 2026, allocated to AI, chips, robotics, and low earth orbit satellites. This is a substantial increase from the $131.8 billion in capex in 2025. The investment reflects the belief that building extensive data centers will provide the necessary compute power to develop superior AI products.
Meanwhile, Reddit is exploring AI-powered search as a significant opportunity for its business. During the company's fourth-quarter earnings call on Thursday, Reddit indicated plans to merge traditional and AI search, hinting at its potential as a revenue driver. Reddit CEO Steve Huffman said that generative AI search would be better for most queries. "There's a type of query were, 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 said.
Startups are also emerging to address the challenges of building and deploying AI applications. Sapiom, launched last summer by former Shopify director of engineering Ilan Zerbib, raised $15 million to develop a solution that simplifies the integration of AI applications with external tech services. Sapiom aims to eliminate backend infrastructure headaches for non-technical creators using "vibe coding" solutions that turn plain-language descriptions into working code. These solutions often struggle to connect applications with services like SMS, email, and payment processing.
The increasing importance of technology, particularly AI, is evident across various sectors. Software, machine learning, and AI are integrated into numerous aspects of daily life, from consumer products to industrial processes. The wealth and influence of tech leaders reflect this dominance, with many of the world's richest individuals having ties to the tech industry.
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