Amazon.com CEO Andy Jassy released his annual shareholder letter, once again defending the company's massive investments in artificial intelligence. The company anticipates capital expenditures of approximately $200 billion this year, with the vast majority directed toward AI initiatives. Jassy stated, "We won't be conservative on this front."
In his letter published Thursday, Amazon.com CEO Andy Jassy reiterated to Wall Street investors that the company's substantial spending in artificial intelligence is fully justified. Jassy wrote, "We won't be conservative on this front—we are investing to become a true leader, and as a result, we expect significant growth in our future business, operating income, and free cash flow."
In February, Amazon.com disclosed an expected capital expenditure of around $200 billion by 2026, predominantly allocated to AI infrastructure, including data centers, chips, and networking equipment. This level of investment surpasses all other major technology peers and represents an increase of nearly 60% compared to last year.
So far this year, Amazon.com's stock has underperformed, declining over 4%, as investors express skepticism about the aggressive AI spending plans and grow increasingly impatient regarding the timeline for returns on these investments. Jassy has previously stated that Amazon.com requires this capital to seize a "once-in-a-generation opportunity" and meet the "extremely high demand" for its AI computing power.
He reaffirmed this position on Thursday and, for the first time, disclosed that the annualized revenue from AI-related services within Amazon.com's cloud computing business has reached $15 billion. Jassy also noted that the company's proprietary chip business, encompassing Graviton processors, Trainium AI chips, and the Nitro architecture, has achieved annualized revenue exceeding $20 billion, with year-over-year growth in the triple digits.
"Our planned capital expenditure of approximately $200 billion by 2026 is not based on intuition alone," Jassy wrote. He added that customers have already made booking commitments for a "significant portion" of this computing capacity, and Amazon.com anticipates monetizing the majority of these investments in 2025 and 2028.
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