Amazon set to join Big Tec

By Deborah Mary Sophia July 31 - Amazon.com is expected to join Google and Microsoft on Thursday in reporting a surge in capital spending on artificial intelligence as Big Tech companies rush to capitalize on the booming technology. The e-commerce giant's capital investments - mostly for building cloud and generative AI infrastructure - is expected to have risen 43% in the second quarter to $16.41 billion, according to LSEG data. The steep spending is also expected to pressure Amazon's margins, outweighing benefits from cost cuts and supply chain efficiencies that are aiding the retail unit's profitability. As a result of the spending increase, Amazon's gross profit margin growth is expected to have slowed to 1.3% in the April-June quarter, compared with 2.6% in the previous quarter and an average of 2.7% over the past two years. Growth in its North American retail business likely slowed to 8% between April and June, from 12.3% in the January-March quarter, amid signs of a wider slowdown in consumer spending and some competition from new and fast-growing Chinese players such as Temu and Tiktok Shop that are enticing more U.S. shoppers.