Amazon CEO Andy Jassy defends AI spending spree in shareholder letter

Amazon CEO Andy Jassy defended the company's program for astir $200 cardinal connected superior expenditures successful 2026, saying successful his yearly shareholder missive that lawsuit commitments and a once-in-a-generation exertion displacement backmost the spending spree.

"We're not investing astir $200 cardinal successful capex successful 2026 connected a hunch," Jassy wrote. "We're not going to beryllium blimpish successful however we play this. We're investing to beryllium the meaningful leader, and our aboriginal business, operating income, and (free currency flow) volition beryllium overmuch larger due to the fact that of it."

Amazon Web Services' AI concern is connected gait to publication $15 cardinal successful yearly revenue, up from fundamentally thing 3 years ago. Across each its services, AWS posted a $142 cardinal annualized gross tally complaint successful the last 4th of 2025. Jassy said capableness constraints are further limiting AWS growth, with immoderate customers incapable to get the compute they want.

Heavy concern successful AI information centers drove up the company's superior expenditures by $50.7 billion, leaving escaped currency travel astatine $11 cardinal for the twelvemonth — down from $38 cardinal the twelvemonth before. On the apical line, Amazon closed 2025 astatine $717 billion, having expanded income by 12% from the $638 cardinal recorded successful 2024. Operating income roseate 17% to $80 billion.

Among the agreements backing Amazon's spending, Jassy pointed to a woody with OpenAI worthy much than $100 cardinal arsenic a awesome of the benignant of request his institution is banking on. Jassy said further deals person been signed oregon are being negotiated — astir of them not yet nationalist — and that existing lawsuit commitments screen a ample stock of what Amazon plans to walk this year.

Amazon's customized spot concern drew salient attraction successful the letter. Amazon's 3 customized silicon lines — Graviton, Trainium, and Nitro — unneurotic nutrient much than $20 cardinal successful annualized revenue, increasing astatine triple-digit gait twelvemonth implicit year. Selling those chips connected the unfastened market, the mode rivals do, would enactment the concern astatine astir $50 cardinal successful yearly revenue, Jassy estimated. Relying connected its ain silicon alternatively than third-party GPUs could shrink the company's superior outlays by tens of billions annually and propulsion operating margins respective 100 ground points higher.

Amazon's fourth-quarter earnings, released earlier this year, revealed the $200 cardinal capex program and rattled investors. Amazon banal fell arsenic overmuch arsenic 10% successful after-hours trading pursuing that release. At the time, Jassy argued the concern was indispensable to support gait with AI demand, pointing retired that each caller information halfway AWS brought online was filling up immediately.