E-commerce giant Amazon reported strong earnings on Thursday but, like its big tech peers Microsoft and Google, saw its stock price fall on concerns over high AI investment costs.

The mounting expenses of data-intensive artificial intelligence and its infrastructure have cast a shadow over this earnings season, with only Facebook owner Meta winning Wall Street's approval.

Meta's stock surged 18 percent in January as investors endorsed its AI strategy.

Amazon's AWS cloud division, along with rivals Microsoft and Google, are investing heavily in AI data centres while meaningful returns remain uncertain.

Amazon CEO Andy Jassy defended the spending, saying the company was on track to spend US$100 billion on capital expenditure in 2025, with the "vast majority" on AI.

The emergence of China's lower-cost DeepSeek model has raised questions about such massive spending.

Despite US government efforts to maintain AI dominance through export controls on advanced chips, DeepSeek has achieved comparable results using authorised, less sophisticated Nvidia semiconductors.

Microsoft, leading the generative AI revolution through its OpenAI partnership, plans to invest about US$80 billion in AI this fiscal year.

And while it has rapidly deployed AI features under its Gemini brand, Google's Cloud revenue missed expectations, despite growing 30 percent to US$12 billion.

Google also announced plans for US$75 billion in capital expenditures for 2025, surprising analysts.

Amazon on Thursday reported its fourth-quarter net income doubled to US$20 billion, with net sales rising 10 per cent to US$187.8 billion.

AWS remained profitable with sales growing 19 percent to US$28.8 billion, though slightly below market expectations.

However, Amazon's shares dropped more than five per cent in after-hours trading, mirroring reactions to Microsoft and Google's results - strong profits overshadowed by concerns about AI spending.

Amazon's forecast of five to nine per cent growth for the first quarter of 2025, with sales between US$151 billion and US$155.5 billion, also fell short of expectations and weighed on the stock price. (AFP)