Amazon CEO sees AI spending 'meaningfully' higher in 2027
Amazon will spend meaningfully more than $220 billion on AI infrastructure in 2027 even as free cash flow sinks.
Amazon CEO Andy Jassy anticipates the company will increase its spending significantly on artificial intelligence in 2027. In its latest earnings report, Amazon reiterated its plan for $220 billion in capital expenditure for 2026, and CEO Jassy stated that the following year will see even higher investment. The world's largest cloud-computing company has been heavily investing in AI data centers, purchasing costly chips and other equipment to accommodate the rising demand for AI.
This surge in spending has resulted in negative free cash flow, as evidenced by a $42.4 billion deficit over the past year. Amazon allocated $75.9 billion to capital expenditures during the third quarter, primarily for AWS and AI infrastructure, as reported by CFO Brian Olsavsky. Despite a dip in revenue and earnings below Wall Street expectations, Amazon's cloud unit demonstrated an improving operating margin.
However, analysts remain concerned about the sharp increase in capital expenditure and the subsequent drop in free cash flow. Jassy maintained confidence in Amazon's AI business model and outlook, asserting that there is a clear line of sight to favorable financial returns.
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