Amazon Plans to Spend $200 Billion on A.I. and Other Projects This Year

The company reported a strong holiday quarter on Thursday. But its big spending on things like artificial intelligence and satellites is starting to make investors nervous.

Amazon said on Thursday that it would spend $200 billion this year on data centers, satellites and other big-ticket items as it invests heavily in the race for artificial intelligence.

The eye-popping dollar figure, which topped Wall Street’s predictions by $50 billion, was the latest in a series of announcements by big technology companies that they plan to dial up their A.I. investments this year.

Despite investors’ worries that it could take years for the hundreds of billions big technology companies are spending on A.I. data centers to pay off, the companies show little sign of slowing down. This week, Google’s parent, Alphabet, said it would spend as much as $185 billion this year, and Meta said last week that its capital expenses, in large part to support A.I., could reach $135 billion.

Amazon’s big spending plan overshadowed a strong holiday quarter for the e-commerce giant. The company reported record sales in its most recent quarter, an indication that its cloud computing business capitalized on the A.I. boom while its retail operation experienced a resilient holiday season.

Amazon said its sales passed $200 billion for the first time, reaching $213.4 billion in the last three months of the year, more than Wall Street expected and up 14 percent from the same period a year earlier. Profit grew 6 percent to $21.2 billion, slightly less than Wall Street expected.

Andy Jassy, Amazon’s chief executive, said in a statement that “strong demand for our existing offerings and seminal opportunities like A.I., chips, robotics and low earth orbit satellites” are the reasons for the enormous spending spree.

The company cautioned that its costs would eat into profit in the current quarter, with operating profits potentially declining to as little as $16.5 billion, about $2 billion less than a year ago.

Investors appeared to be spooked by Amazon’s plans, and the company’s share price fell 8 percent in after-hours trading.

Amazon’s cloud computing division saw sales grow 24 percent to $35.6 billion as the business gained momentum after initially lagging in the A.I. race. It was the fastest growth in about three years.

For the past several quarters, Amazon has been racing to open more data centers to meet pent-up demand from its corporate customers. In late October, Amazon opened its largest data center, in Indiana, to begin serving the A.I. company Anthropic, which Amazon has also invested in.

Amazon spent more than $38 billion on capital expenditures in the quarter, bringing its total for the year to more than $128 billion. That’s largely gone to building data centers, though it also includes warehouses and other facilities for its e-commerce business.

Amazon’s willingness to invest in what it believes to be its future stands in stark contrast to major cost cutting at The Washington Post, which is owned by Amazon's founder, Jeff Bezos, who is the board chair. The Post on Wednesday slashed its newsroom, cutting more than 300 of the roughly 800 journalists.

Mr. Bezos is Amazon’s largest shareholder, with more than $200 billion worth of stock. He is also investing heavily in his rocket company, Blue Origin, which is competing with Elon Musk’s SpaceX for government contracts.

While investors have focused on Amazon’s cloud computing more than ever, Amazon’s retail business has become more profitable than in the past.

Despite worries about the impact of tariffs and an uncertain job market, consumer spending held relatively strong in the holiday season. The number of items that Amazon sold in the final quarter of 2025 grew 12 percent, a higher rate than in 2024, before President Trump unveiled his tariff plans. In North America, sales topped $127 billion, up 10 percent.

The most profitable parts of Amazon’s retail business, including advertising, have been growing. It had $21.3 billion in ad sales for the quarter.

Amazon has also been cutting costs, by making its warehouse operations more efficient and adding to its retail business without expanding its work force. Amazon ended the year with 1.576 million employees, up just 1 percent.

Last week, Amazon announced it was closing its Amazon Go cashier-less convenience stores and its Amazon Fresh grocery stores. Layoffs from those stores surpassed 7,500 people, according to state filings.

In October and January, the company has also laid off a combined 30,000 corporate and technology employees, in what Mr. Jassy has said was driven by a desire to reduce bureaucracy. Engineers accounted for roughly half of those who lost their job in Washington, Amazon’s home state, according to disclosures filed there.

Related Content