Amazon CEO Andy Jassy says AI spending will rise again in 2027

Amazon is pouring record amounts of cash into artificial intelligence, and the bills are only getting bigger. Andy Jassy, the chief executive of Amazon, told investors on Thursday that the retail and cloud giant expects to spend meaningfully more on AI infrastructure in 2027.

According to Business Insider, Amazon is already locked into a staggering $220 billion capital expenditure plan for 2026, building massive data centers and buying expensive chips to meet surging demand. That heavy spending has left a deep mark on the company's books.

Amazon's free cash flow sank into a negative hole of $42.4 billion for the trailing twelve months, driven by $75.9 billion in cash capital expenditures during the third quarter alone, as Brian Olsavsky, the chief financial officer of Amazon, explained to markets.

Investors grew nervous as third-quarter earnings missed Wall Street expectations, sending Amazon shares tumbling roughly 6 percent in after-hours trading. "The cloud unit's improving operating margin was one welcome signal, but it may not be sufficient to alleviate concerns about the sharp spike in capex spending and corresponding freefall of its free cash flow," Sky Canaves, a principal analyst at eMarketer, said in a statement.

Jassy defended the strategy as a once-in-a-lifetime opportunity, arguing that AI chips and servers typically break even in less than three years. Power shortages and construction delays have slowed down the rollout of new server racks, but AWS revenue still surged 39.3 percent year over year to $46 billion.

Jassy expects AWS revenue to grow more than 40 percent in both 2027 and 2028, backed by massive customer bookings stretching years into the future. When a warehouse giant starts burning billions on empty server racks, it is worth watching where the tech winds are blowing.

Photo: Lisi Mezistrano Wolf, CC BY-SA 4.0, via Wikimedia Commons, edited