Amazon CEO defends its $200B spending plan

In a Thursday shareholder letter, Amazon CEO Andy Jassy doubled down on the company’s massive $200 billion capital expenditure plan for 2026 aimed at AI, AWS data centers, chips, and space.

The figure shows a nearly 60% increase from 2025, with most spending directed toward AI infrastructure, such as data centers and chips.

Tech industry CEOs are under pressure to demonstrate that their enormous AI investments over the past few years are yielding returns. Jassy emphasized that these investments are backed by significant demand rather than a “hunch.”

While Amazon maintains semiconductor partnerships with Nvidia, Jassy noted demand for its homegrown Trainium AI chips is very high, and even the unreleased Trainium4 is nearly sold out.

As a result, Amazon’s chip business has reached a $20 billion annual revenue run rate, though Amazon estimates it would hit $50 billion if sold externally.

Beyond chips, Amazon’s mid-2026 launch of the Starlink rival, Amazon Leo, remains on track, and has contracts from NASA, Delta Airlines, AT&T, and more.

Jassy also suggested Amazon could sell robots for commercial and industrial use one day, since it already has knowledge and data from 1 million warehouse robots.

Overall, the CEO looks to endure short-term free cash flow headwinds to secure Amazon’s leadership in AI, space, and more. 

Shares responded positively, closing up 5.6% after his letter’s release.