Amazon CEO defends AI spend, pokes at rivals
Amazon CEO defends AI spend, pokes at rivals
The annual letter to Amazon shareholders was 5,000 words, but it could be summed up in seven: We’re gonna keep throwing money at AI. Yesterday, CEO Andy Jassy doubled down on the company’s plan to spend more than any other tech company this year on AI, data centers, chips, robotics, and satellites. “We’re not investing approximately $200 billion in capex in 2026 on a hunch,” Jassy wrote. The letter said: - Amazon expects to start making its money back next year on multibillion-dollar deals with customers like OpenAI.
- Revenue from AI services and chips is booming, with customers wanting “better price-performance” for chips—a subtle jab at Nvidia.
Jassy warned that Amazon is OK with being strapped for cash flow in the short term because it anticipates a major payoff from AI, which Jassy called a “once-in-a-lifetime opportunity.” “We’re not going to be conservative in how we play this,” he said. Where the capex will go: Reiterating Amazon’s previously announced plans, Jassy said its hefty AI investing will support efforts to further robotize its warehouses, grow its soon-to-launch network of Starlink-competing satellites, and expand rural and drone-aided delivery. Zoom out: Shares of Amazon had been down this year as investors questioned its $200 billion capex plan, but yesterday’s remarks putted the stock into the green. |
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