Amazon Also Expands AI Investment... Raises This Year's Capital Expenditure to $220 Billion

[Financial News, New York = Reporter Lee Byung-chul] Amazon has raised its capital expenditure plan for this year from $200 billion to $220 billion to expand investment in Artificial Intelligence (AI) infrastructure. The move is aimed at responding to rising memory prices for AI servers and surging cloud demand. As Alphabet Inc., Meta Platforms, and Microsoft have already increased their spending, Amazon's decision is intensifying the global big tech race in AI capital investment.
Amazon said during its earnings conference call on the 30th local time, after announcing second-quarter results, that it would increase this year's capital expenditure to $220 billion. That is $20 billion more than the $200 billion it had outlined in February.
CEO Andy Jassy said, "Rising memory prices are the direct driver behind the increase in capital expenditure," adding, "Even with $220 billion in investment, it is still not enough to meet all demand for 2026." He also said, "This situation is likely to continue into 2027," and emphasized, "Just the demand we have already secured for 2028 is astonishing."
The remarks suggest that demand for data centers and AI semiconductors continues to outpace supply as AI services spread.
Wall Street had already expected Amazon to expand investment after Alphabet Inc. raised its own capital expenditure plan for this year to as much as $205 billion.
The backdrop to the aggressive spending is the sharp growth of Amazon's cloud business. Revenue from Amazon Web Services (AWS) reached $42.2 billion, up 37% from a year earlier. That beat market expectations of $40.54 billion and far exceeded Wall Street's forecast of 31% growth.
Jassy said, "AWS is growing explosively right now," describing it as "the fastest growth rate since 2021."
He added that both the AI business and the company's in-house AI semiconductor business have surpassed an annualized revenue run rate of $25 billion each. Amazon is nurturing its proprietary AI chips, including Trainium and Graviton, as next-generation growth engines, while its generative AI platform for enterprises, Bedrock, is also expanding rapidly.
Meanwhile, AWS backlog, which has not yet started service, reached a record high of $496 billion.
Second-quarter revenue came in at $200.61 billion, beating the market estimate of $196.47 billion. Net income reached $62.6 billion, or $5.75 per share. However, the company said $53.4 billion of that reflected valuation gains from its investment in AI startup Anthropic.
As a result of the large-scale investment, free cash flow over the past 12 months turned negative at $7.6 billion. That compares with an inflow of $18.2 billion a year earlier.
Even so, Jassy made clear that the company will maintain its investment stance, saying, "The current level of investment is essential to handle the surging demand for AI and cloud services."


[email protected] Reporter Lee Byung-chul Reporter