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Amazon offices in Dublin, Ireland, in October, 2025.Damien Eagers/Reuters
Amazon.com AMZN-Q on Thursday joined its Big Tech peers in projecting massive capital expenditures in 2026, the freshest sign yet that tech companies will not be hitting the brakes on their hefty AI investments anytime soon.
The company said it expects to invest about US$200-billion in capital expenditures across Amazon in 2026, compared with an estimate of US$144.67-billion, according to data compiled by LSEG.
Big Tech is spending enormous amounts of money on processors, data centres and networking equipment as the companies rush to build out their AI infrastructure. The top 4 hyperscalers – Amazon, Microsoft MSFT-Q, Alphabet’s Google GOOGL-Q and Meta META-Q – are expected to collectively spend more than US$500-billion this year.
But tech earnings over the past few days have shown that Wall Street has a clear message for tech companies: Soaring AI spending can continue only if companies show commensurate operational or financial returns.
Google’s eye-watering capex forecast of US$175-billion to US$185-billion for the year got a pass from investors as the company delivered stellar growth in its cloud revenue, as did Meta’s plan to spend between US$115-billion and US$135-billion.
But investors punished Microsoft’s stock last week after its cloud unit growth just squeaked past estimates.
For Amazon, the largest cloud services provider in the world, enterprise demand for both AI infrastructure and core digital migration workloads has been strong, even as industrywide capacity constraints limit its ability to fully meet the demand.
The company invested heavily in the fourth quarter to ease those constraints. It launched its AI infrastructure project “Rainier,” bringing nearly half a million of its in-house Trainium2 chips online, primarily for use by Claude chatbot-maker Anthropic.
Although a smaller unit for Amazon, contributing just 15 per cent to 20 per cent to overall sales, AWS generates over 60 per cent of the company’s operating profit.
Amazon has also been investing in its e-commerce business, seeking to draw more customers by expanding to rural areas in the United States, boosting its same-day and next-day delivery capabilities and deepening its push into perishable foods.
The company has been making major changes in its retail division, the latest bet being an expansion of its Whole Foods footprint and a 225,000-square-foot mega-store meant to compete with the likes of Walmart and Costco.
