Amazon’s AI infrastructure spending to hit $220bn this year

Amazon now expects to spend $220 billion on AI infrastructure in 2026, an increase of $20 billion on its last prediction, as memory costs push up expenditures.

Andy Jassy, Amazon’s chief executive, told investors on a quarterly earnings call on Thursday that the spending was warranted as the company lacks sufficient capacity to meet demand for its cloud offering, Amazon Web Services (AWS).

The division’s sales rose 37 per cent year-on-year to reach $42.2 billion for the second quarter of 2026. The growth was its highest in more than four years, contributing to the company trading up nine per cent after markets closed.

“AWS is booming, growing 36.7 per cent year-over-year in Q2; our fastest growth in 18 quarters,” Jassy told investors prior to the call.

Amazon is facing pressure to grow its cloud provision, which is currently the largest in the world, as rivals such as Google’s Cloud offering eat into its market share; Cloud grew 82 per cent year-over-year in Q2 and brought in $24.8 billion.

The company is currently undergoing a major restructuring in its AI division, laying off a large number of workers in an attempt to streamline costs as it works towards creating the “most capable intelligent models out there”, according to Amazon senior vice president Peter DeSantis.

Despite this, Amazon continues to invest heavily in AI. Alongside the capital expenditure, the company has committed to invest at least $75 billion in AI giants Anthropic and OpenAI in the past year, according to the Financial Times, and continues to pledge billions for other internal projects.