This is why Amazon plans to pump more into AI, chips and robotics
Amazon has said that it is planning to pump more funding into AI, chips and robotics after launching $200bn (£147bn) investment plans.
Shares in the company slid in value after it became the latest tech giant to commit to vast spending plans in a bid to keep pace with rivals across the sector.
The investment plan, which covers 2026 alone, outpaces similar commitments by rivals including Microsoft and Google.
Capital Expenditure will surge from almost $130bn (£95.8bn) in 2025, as it pours money into opening more data centres.
It came as the Silicon Valley firm founded by Jeff Bezos reported that net sales increased by 14 per cent to $213.4bn (£157.3bn) in the final three months of last year.
This included 10 per cent growth in North America and 17 per cent growth in its international business.
Meanwhile, sales in Amazon Web Services lifted by 24 per cent to $35.6bn (£26.2bn) for the period.
Andy Jassy, president and chief executive of Amazon, said: “AWS growing 24 per cent (our fastest growth in 13 quarters), advertising growing 22 per cent, stores growing briskly across North America and International, our chips business growing triple digit percentages year-over-year – this growth is happening because we’re continuing to innovate at a rapid rate, and identify and knock down customer problems.
“With such strong demand for our existing offerings and seminal opportunities like AI, chips, robotics and low-Earth-orbit satellites, we expect to invest about 200 billion dollars in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital.”
It comes only a week after Amazon told staff it plans to cut around 16,000 jobs globally as part of efforts to streamline its operations.
Earlier this week, The Washington Post – the newspaper group owned by Mr Bezos – also announced it would lay off around a third of its workforce.
Russ Mould, investment director at AJ Bell, said: “It’s been obvious for a while that the market isn’t a fan of huge AI spending commitments from the big tech contingent and the reaction to Amazon’s latest update is just the latest example.
“Piling billions into artificial intelligence, in what seems a never-ending spending splurge, has the feel of a kid let loose in a candy shop. The damage done to Amazon shares in pre-market trading is the equivalent of a stern rebuke from a parent.
“The scale of Amazon’s proposed outlay for 2026 is unquestionably astonishing and, significantly, is even more than rivals like Google and Microsoft have committed to.
“All the hyperscalers are competing to win the AI race, for which the prize could be significant. However, investors are being asked to countenance enormous amounts of cash going out the door in service of this goal. With the exact direction and trajectory of artificial intelligence still uncertain there is understandable concern that this money could be wasted.
“Compounding matters, Amazon’s earnings for the last three months of 2025 and outlook for the current quarter were weaker than anticipated. One silver lining was cloud computing which saw better growth than the market had expected.”