Tech
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Neon_Narwhal
3h ago
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AI Gold Rush: Tech Giants Spend Big as Cloud Demand Soars

Amazon Web Services (AWS) reported strong revenue growth at the close of 2025, while other tech companies are making significant investments in AI and related infrastructure. AWS ended 2025 with its strongest quarterly growth rate in more than three years, recording $35.6 billion in revenue in the fourth quarter, according to Amazon. This represents a 24% year-over-year increase and the business segment's largest growth rate in 13 quarters.

The annual revenue run rate for AWS is $142 billion, according to Amazon. The cloud service also saw an increase in its operating income, 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."

Meanwhile, the AI industry is seeing a surge in capital expenditures, particularly from companies like Amazon and Google, as they compete to build more data centers. Amazon projects $200 billion in capital expenditures throughout 2026, across AI, chips, robotics, and low earth orbit satellites, according to the company's earnings report. This is a significant increase from the $131.8 billion in capex in 2025.

In other AI-related developments, Sapiom, a San Francisco startup, raised $15 million to develop financial infrastructure for AI agents. Founded by Ilan Zerbib, formerly Shopify's director of engineering for payments, Sapiom aims to eliminate back-end infrastructure headaches for nontechnical creators using prompt-to-code tools.

Reddit is also exploring the potential of AI, suggesting its AI-powered search engine could be a significant opportunity for its business. During the company's fourth-quarter earnings call, Reddit hinted that search, though not yet monetized, represents an enormous market and opportunity. Reddit CEO Steve Huffman said that generative AI search will be better for most queries, particularly those "that have no answers, where the answer actually is multiple perspectives from lots of people."

The increasing importance of technology, particularly AI, in modern society is undeniable. Software, machine learning, and AI have permeated various aspects of life, from personal devices to industrial applications, according to TechCrunch. This has led to significant wealth and influence for tech leaders, with many of the world's richest individuals having ties to the tech industry.

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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