Amazon’s $220 Billion AI Bet
Amazon (NASDAQ: AMZN) plans to invest over $220 billion in capital expenditures by 2026, a significant portion allocated to AI infrastructure. This investment is crucial for maintaining its competitive edge as the leading cloud provider, especially amidst increasing demand for AI services.
In the second quarter of 2026, Amazon Web Services (AWS) reported a 37% year-over-year revenue growth, with operating income increasing by 63%. However, this aggressive spending has led to an outflow of approximately $7.6 billion in free cash flow as of June 2026, compared to an inflow of $18.2 billion the previous year. Other tech giants, including Microsoft and Alphabet, are also committing substantial resources, with a combined expected spending of about $760 billion on AI infrastructure by 2026.
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