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Why Amazon is now spending more on data centers than on e-commerce warehouses

AI is where the growth is.

7/1/24 9:51AM

Amazon, the company known quickly shipping goods to consumers from its online marketplace, is now spending more money on data centers than e-commerce warehouses, according to The Wall Street Journal. Why? In short: AI.

ISO its next “pillar” of growth

For years the company has been searching for its next “pillar of growth” to add to its first three pillars: its online marketplace, Amazon Prime membership program, and cloud-computing business Amazon Web Services. It’s hoping artificial intelligence will be a big part of that growth.

Build your own instead of competing for space

Access to data centers is a key battleground for those hoping to compete in AI, because the tech requires so much computing power.

According to a new report by real estate services company CBRE, “Large corporations face increasing difficulty securing data center capacity.” An astonishing rate of data center space is being leased before it’s even built.

So Amazon is spending even more on its own data centers in order to compete. Amazon plans to add at least 216 new data-center buildings in the next several years, according to WSJ reporting.

Everyone else is doing it

Amazon is clearly not the only one looking to AI for growth. A number of major tech companies are investing record sums on capital expenditure thanks to AI. (Companies in general can’t stop talking about AI and the topic reeks of FOMO)

Claire Yubin Oh

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Waymo’s now serving more than 500,000 paid robotaxi rides every week

The Alphabet-owned company grew its ridership more than tenfold in less than two years.

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Judge blocks Pentagon’s move to blacklist Anthropic

A federal judge in Northern California has granted a preliminary injunction blocking the Pentagon from labeling Anthropic as a national security supply chain risk.

The ruling temporarily prevents the Defense Department from restricting the AI company’s access to federal contracts amid a dispute over its refusal to allow certain military and surveillance uses of its technology. The designation could also have shifted lucrative government work toward competitors, including OpenAI.

Earlier this month, Anthropic, the company behind Claude, sued 17 federal agencies and their heads, alleging the government exceeded its statutory authority.

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Report: SpaceX’s record IPO may grant preferential access to retail investors and Tesla shareholders

SpaceX’s impending IPO could raise $40 billion to $80 billion and rank as the largest ever — as well as one of the most unconventional.

The Wall Street Journal reports several ways CEO Elon Musk is considering breaking with IPO norms:

Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

Exclusive | The SpaceX IPO Will Be Just as Unconventional as Musk Himself

Investors in his other companies, including Tesla, could receive preferential access to shares.
Individual investors may get a third or more of the allocation, far above the typical ~10% mark.
Instead of a traditional road show, Musk wants investors to visit SpaceX facilities in person.

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Tesla released estimates for Q1 deliveries and they’re lower than analysts expected

Ahead of first-quarter earnings next month, Tesla released its own company-compiled Wall Street consensus estimate for deliveries: 365,645 vehicles. While that’s lower than the 382,000 FactSet consensus estimate, it represents a nearly 9% jump from Q1 2025, when Tesla sold 336,681 vehicles.

Tesla started releasing its own consensus estimates to the public — not just institutional investors — for the first time in Q4 2025. The move was seen as a way to temper investor expectations, as other estimates were too high. Last quarter, Tesla’s compilation was closer to actual numbers, which fell 16% year over year.

The market-implied odds from event contracts suggest 64% of traders think Tesla’s Q1 deliveries will be more than 350,000, 44% think it will be higher than 360,000, and just 21% have it at higher than 370,000.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

The toughest AI benchmark just got a whole lot tougher

ARC-AGI-3 is the latest version of a clever benchmark that challenges AI models to solve mini video games with no written instructions.

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