We’re not going to be conservative

Amazon CEO Andy Jassy released its annual report on Thursday shareholder letter and once again showed Wall Street investors that the company’s massive investments in artificial intelligence were worthwhile.

“We’re not going to be conservative about how we play this; we’re investing to be a meaningful leader and our future business, operating income and [free cash flow] so it will be much bigger,” Jassy wrote.

The company said in February that it expects to spend about $200 billion on capital expenditures this year, with the lion’s share going to artificial intelligence infrastructure, including data centers, chips and networking hardware.

This is more than any other tech peer and is an increase of almost 60% over last year.

Amazon shares have struggled so far this year as investors question the company’s aggressive AI spending plans and become increasingly impatient about when investments will pay off. The stock is down more than 4% year to date.

Jassy said Amazon needs capital to pursue a “once-in-a-lifetime opportunity” and keep up with “very high demand” for the company’s AI computing.

He reiterated that argument on Thursday, and also announced that for the first time, AI revenue in the cloud computing segment had reached an annual figure of $15 billion.

Amazon’s custom chip business, which includes Graviton processors, Trainium AI chips and Nitro architecture, generates more than $20 billion in annual revenue and is “growing at triple-digit percentages” year over year, Jassy said.

“Based on intuition, we are not investing nearly $200 billion in capital expenditures in 2026,” Jassy wrote. He added that Amazon has received customer commitments for a “significant portion” of this spend and expects to monetize most of it next year and in 2028.