Amazon sharply increased investments in artificial intelligence

Amazon has raised its capital expenditure forecast for 2026 from $200 billion to approximately $220 billion. The additional funds will primarily be directed toward artificial intelligence infrastructure, cloud services, and new data centers.

Amazon CEO Andy Jassy explained the plan revision by rising memory chip prices and high demand for computing power. According to him, even after increasing investments, the company will not be able to fully meet the expected demand in 2026, and capacity shortages could persist into the next year.

Amazon is ramping up spending following strong results from its cloud division, Amazon Web Services. In the second quarter, AWS revenue grew 37% year-over-year to $42.2 billion. This is the highest growth rate for the company's cloud business in the last 18 quarters.

Amazon's total revenue increased by 20% to $200.6 billion. The company continues to invest in servers, data centers, networking equipment, and specialized processors needed for training and running artificial intelligence models.

In the second quarter alone, Amazon's spending on property and equipment reached $54.2 billion, up 68% year-over-year. The large-scale investments have led to a decline in free cash flow, as infrastructure construction requires expenses long before generating revenue from new capacities.

Amazon is developing its own Trainium and Graviton processors but continues to purchase Nvidia hardware used by AWS customers. The company is also expanding its partnership with Claude developer Anthropic and offers its technologies through the cloud platform Bedrock.

Amazon's net profit in the second quarter amounted to $62.6 billion, but a significant portion of this result is tied not to ongoing operations but to the revaluation of the company's stake in Anthropic. Amazon reported $53.4 billion in other pre-tax income, largely due to the increased value of this investment.

Jassy stated that demand for AI-related services is already forming years ahead. The company expects that infrastructure investments will enable AWS to serve more corporate clients and strengthen its position in the competition against Microsoft and Google.

Based on materials from: Amazon