Amazon plans to increase AI investment in 2027

Amazon expects its 2026 capital spending to reach about $220 billion, with most of that going to AWS, and plans to spend even more in 2027, CEO Andy Jassy said on October 29. He described the investment as essential to meeting growing demand for cloud and AI services and said Amazon sees a path to strong financial returns.

The company spent $75.9 billion on cash capital expenditures in the third quarter, mainly for AWS and AI infrastructure. Its free cash flow over the trailing 12 months was negative $42.4 billion. Amazon’s quarterly revenue and earnings also fell short of Wall Street expectations, and its shares dropped about 5% to 6% in after-hours trading.

AWS revenue rose 39.3% from a year earlier to $46 billion, marking its strongest expansion in close to five years. Jassy forecast that the cloud division would post growth exceeding 40% in each of the next two years. He described AWS as a business with an annualized revenue run rate of $184 billion and said it could reach $1 trillion in annual revenue within five to 10 years.

Jassy said major customers are reserving large blocks of capacity well in advance, giving Amazon a view of demand into 2027, 2028 and, in some cases, 2029. He said AI infrastructure can take years to build and that Amazon cannot slow the investment without risking its position in a fast-moving market. The company says AI servers can break even in under three years once deployed.