Featured Image Credit: Michael M. Santiago/Getty Images
Topics: Amazon, Jeff Bezos, Donald Trump, Artificial Intelligence, Money, US News, Technology
Ellie Kemp
Topics: Amazon, Jeff Bezos, Donald Trump, Artificial Intelligence, Money, US News, Technology
The world's largest online retailer is forecast to lose $3 billion in revenue, driven in part by AI.
For now, Amazon has outshone revenue expectations for its fourth quarter.
The Jeff Bezos-founded company beat analysts' estimates with its revenue earnings, reporting $187.8 billion surpassing the estimated $187.3 billion.
Revenue saw an increase of 10% percent from the previous year.
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Amazon's profit also sky-rocketed after cost-cutting measures, which included staff reductions over a two-year period and saw net income increase by a huge 189 percent year-on-year to $20 billion.
However, it's not all glory for the retailer, as it's predicted to see a $3 billion dip - due to both foreign exchange rates and AI.
Amazon expects revenue of $151.0 billion and $155.5 billion, less than its estimated $158.5 billion.
In its statement, the business said it 'anticipates an unusually large, unfavourable impact of approximately $2.1bn from foreign exchange rates.'
The rest is down to the AI industry facing a slowdown as tech giants attempt to take on surging demand.
Last month, Donald Trump issued a warning to the industry after Chinese AI startup DeepSeek wrecked havoc the the stock market, with the international release of its chatbot - similar to OpenAI's ChatGPT.
The company, founded only in 2023, was able to develop its AI model on a much smaller cost than those already in existence, sparking concern among the industry.
Powered by the open source DeepSeek-V3 model, its researchers claim the AI model was trained for around $6 million.
What's more, the Chinese company claims it uses eight times less the amount of specialized chips to do so.
DeepSeek was supposedly trained on 2,000 GPU chips compared to an estimated 16,000 for leading models.
The US president declared it a 'wake-up call' for American companies who must focus on 'competing to win'.
Meanwhile, Amazon CEO Andy Jassy announced the company would invest $100 billion in AI this year to cash in on the 'once-in-a-lifetime type of business opportunity.'
Jassy claims the 'vast majority' of this capex spending will be directed towards bolstering AI capabilities within its cloud computing arm, AWS.
AI is, 'for sure, the biggest opportunity since cloud and probably the biggest technology shift and opportunity in business since the Internet,' Jassy said on call with investors after the company released its fourth-quarter earnings report.