- Amazon’s AI infrastructure bill is getting even bigger, with 2026 cash capex now expected to hit $220B
- AWS is riding its strongest growth in 18 quarters, fueled by a massive AI backlog
- CEO Andy Jassy said it is in discussions to make Trainium available outside AWS
Amazon tacked another 10% onto its already ballooning capital expenditures budget, revealing plans to spend $20 billion more than originally planned in 2026 due to rising memory prices.
“We now believe we will spend approximately $220 billion in cash CapEx in 2026,” Amazon CEO Andy Jassy said on an earnings call.
The news came as Amazon scrambles to spin up new capacity to serve a $496 billion order backlog that has grown 2.5x over the last year alone.
Despite the hurdle, Jassy said Amazon’s data center expansion is coming along at a crisp clip.
“We’re on pace with the capacity build that we talked about a few quarters ago, where we said we expect to have double the power capacity by the end of 2027 that we had in 2025, and we continue to be on that track,” he said.
In addition to buying up Nvidia and AMD GPUs to fill its data centers, AWS has also been using its in-house Trainium chips. The company has struck notable deals with Anthropic and OpenAI to use its chips, but has not yet begun selling Trainium outside of AWS. But that could change, Jassy said.
“We do have an increasing number of customers who are interested in us providing the Trainium chips to them, separate from our cloud, and we’re actively having those conversations and exploring, and I expect there’s a real chance we’ll do that in the future,” he said.
Rival Google Cloud recently said it would make its TPUs available to certain customers for use in their own data centers.
Mulling the metrics
Consolidated revenue rose 20% year on year to $200.6 billion, with AWS revenue up 36.7% to $42.2 billion. Jassy said the AWS growth was the highest it’s been in 18 quarters. Net income jumped from $18.1 billion to $62.6 billion, with AWS operating income of $16.6 billion.
Sid Nag, Tekonyx founder and chief research officer, said on LinkedIn that Amazon’s results “reinforce two conclusions. Enterprise AI demand is translating into cloud consumption, and AWS remains Amazon’s primary profit engine.”
Nag added that the key question is around Amazon’s ability to sustain favorable economics while supporting its behemoth infrastructure buildout. “The next benchmark is proving that AI infrastructure can consistently generate durable cloud-like returns while supporting one of the largest capital investment cycles the technology industry has ever seen,” he wrote.
For his part, Jassy seems to think it can. He likened what is happening now to what Amazon already pulled off during the cloud era. The time horizon is just shorter, with demand requiring more data centers to be built simultaneously “in advance of when we can start monetizing them.”
The CEO acknowledged that Amazon will continue to spend a lot on capex and “encounter free cash flow headwinds” until the infrastructure it is building comes online. But a few years after they’re lit up, when revenue growth once again outpaces capex growth, “the resulting revenue, free cash flow, and return on invested capital is very compelling,” Jassy added.
Cloud market snapshot
Zooming out, Synergy Research Group noted that spending on cloud infrastructure services jumped 43% to $143.4 billion in Q2 2026, with the market doubling in size over the last 11 quarters. Amazon, Microsoft and Google account for 67% of the market, though neoclouds including CoreWeave, OpenAI, Oracle, Crusoe, Nebius, Anthropic and Nscale are rapidly gaining ground.
“AI technology has lit a fire under the cloud market and is now driving unprecedented growth,” Synergy’s Chief Analyst John Dinsdale said in a statement. “GenAI-specific cloud services are growing at 165% year over year, but equally importantly, AI technology is enabling enhanced functionality and increased growth across a much broader range of cloud services.”
Despite a rising sovereignty movement in Europe and other regions, Dinsdale pointed out the U.S. share of the global market also increased in the quarter. This reflects “the huge buildout of U.S. infrastructure by both hyperscale cloud operators and neoclouds,” he said.
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