Amazon Boosts AI Spending by $20 Billion Amid Rapid Cloud Growth

Amazon announced it will boost its spending on technology, mainly artificial intelligence (AI), by an additional 10 percent this year. The e-commerce giant reported strong profits and net sales during its fiscal second quarter, helped by rapid growth in its prominent cloud computing unit.

The company's cloud computing arm, AWS, saw a 37% increase in sales during the April-June period, outpacing the previous quarter's 28% clip. Amazon now expects capital spending to total $220 billion, including outlays on robots, semiconductors, and satellites.

CEO Andy Jassy attributed the higher cost of memory chips as the main reason for the increased investment. Despite this, shares rose more than 9 percent in after-hours trading.