AMAZON SHARES SLIDE AMID PLANS TO INVEST US$200 BILLION

SAN JOSE (California, United States), Feb 6 (Bernama-dpa) -- Online retail giant Amazon disappointed investors with plans to invest around US$200 billion this year in areas including artificial intelligence (AI), chips, robotics and satellites, German Press Agency (dpa) reported. 

The company's share price fell by around 8 per cent in after-hours trading on Thursday.

Chief executive officer Andy Jassy said that the company expected "strong long-term return on invested capital."

Amazon wants to establish itself for the AI era with its cloud division AWS, which already supplies many companies with computing power.

Revenue from the AWS division grew by 24 per cent year-on-year to US$35.6 billion in the last quarter, exceeding analysts' average expectations.

Other tech companies are also investing heavily in expanding their AI capabilities. On Wednesday, Google's parent company Alphabet announced capital investments of between US$175 billion and US$185 billion for the current year.

Facebook's parent company Meta is planning to invest between US$115 billion and US$135 billion. 

At the same time, it remains unclear whether the enormous investments in AI technology and the infrastructure for it can ever be recouped.

Amazon's spending offensive is being financed by both its cloud division and its thriving retail business. In the last quarter, the group's revenue grew by 14 per cent to US$213.4 billion. The bottom line was a profit of US$21.2 billion, after a profit of US$20 billion a year earlier.

--BERNAMA-dpa