Amazon (AMZN) is spending big to keep its edge in the lucrative cloud computing business. However, the company’s Chief Executive Officer, Andy Jassy, has reiterated that they cannot keep up with the demands of artificial intelligence. According to Jassy, the tech giant faces the risk of capacity issues owing to delays in getting the necessary hardware to keep up with the AI boom.
Tech AI Spending Spree
Additionally, securing reliable and sufficient electricity is also proving to be a challenge for Amazon. Being a power-intensive endeavour, tech giants have been forced to invest billions of dollars in nuclear power and another clean energy source to secure enough energy to power data centres at the center of the AI boom.
Jassy has warned that Amazon could have been growing faster had it not faced the unbending string of capacity constraints. According to Jassy, Amazon Web Services’ ability to launch new data centres is being constrained by the supply of chips from outside vendors, Amazon’s own chip design unit, and power capacity. However, the constraints will probably loosen in the second half of 2025. The great majority of Amazon’s $26.3 billion in capital expenditures during the final three months of 2024 were allocated to AWS AI projects as the company looks to strengthen its cloud offerings amid the AI race
Similarly, Amazon is not the only company experiencing capacity constraint pressure amid the AI race. Microsoft (MSFT) has already warned that its fourth-quarter cloud sales were hurt due to insufficient data center capacity needed to handle AI products.
Brookfield $20.7B AI Bet
Meanwhile, Brookfield Asset Management (BAM) intends to invest $20.7 billion over the next five years to build data centres and AI infrastructure in France. The massive investment comes as competition among global powers to dominate artificial intelligence grows. Data4 is the portfolio company that will lead the €15 billion in data center investments made by the New York-based investment firm. Brookfield intends to use the remaining funds for AI infrastructure initiatives throughout France, including data transmission, chip storage, and energy production.
Europe is currently catching up after falling behind the US and China in the AI race. Even though some French startups, like Mistral AI SAS, have raised significant sums of money in comparison to their European counterparts, they have found it difficult to compete. France will be able to stay in the race alongside major AI players thanks to Brookfield’s €20 billion investment, particularly through Data4.
The Brookfield $20 billion AI investment comes on the heels of the United Arab Emirates stating plans to invest between €30 billion and €50 billion in a new data center campus in France as part of this fight for independence.
Salesforce AI Hires
Separately, Salesforce (CRM) is cutting more than 1,000 roles as it looks to carry out new hires focused on selling its new artificial intelligence products. The leading maker of customer amendment software has been on a restructuring drive as it focuses its efforts and resources on providing much-needed AI products and services.
