Amazon's cloud computing division, Amazon Web Services, has reported a fourth-quarter revenue of $28.7bn (£23.1bn), slightly missing expectations and raising concerns about the tech giant's investment in artificial intelligence (AI).
The news comes after Chinese startup DeepSeek launched a low-cost AI chatbot that disrupted global markets, wiping more than $1.2 trillion off tech firms at the opening bell, as reported by .
Following the announcement, Amazon’s shares fell by five per cent to $225.97 in after-hours trading.
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This comes amid wider concerns around the cloud computing sector, with Alphabet, Google’s parent company, reporting a 30 per cent increase in revenue for its cloud unit but still failing to meet market expectations.
Microsoft’s Azure business also reported slower growth last quarter. Despite these challenges, Microsoft’s CEO Satya Nadella emphasised the importance of continued investment in AI infrastructure to meet anticipated demand, stating: "As AI becomes more efficient and accessible, we will see exponentially more demand".
Matt Britzman, a senior equity researcher at Hargreaves Lansdown, commented on Amazon's position: "A strong investment forecast for 2025 would be a boon for the whole AI trade, especially since Meta, Alphabet, and Microsoft are doubling down on AI investment."
Despite facing challenges in its cloud sector, Amazon registered a ten per cent increase in total sales to $187.8 billion in the fourth quarter, bolstered by a strong holiday shopping season.
The tech behemoth's retail division reported a seven per cent jump in online sales over the quarter, amounting to $75.6 billion.
Andy Jassy, Amazon's chief executive, reflected on the period, stating: "This was our most successful holiday shopping season just yet, and we’re grateful for the customers, selling partners, and employees who made it possible".