Amazon (NASDAQ:AMZN) Chief Executive Andy Jassy said in his annual shareholder letter that the company expects to spend roughly $200 billion on capital expenditures in 2026, with the bulk directed toward building out artificial intelligence infrastructure.
Jassy said Amazon Web Services’ AI business has reached a revenue run rate of more than $15 billion in the first quarter of 2026. He noted that this represents growth nearly 260 times faster than AWS experienced at a similar point earlier in its development. The company added 3.9 gigawatts of power capacity in 2025 and plans to double its total capacity by the end of 2027.
Amazon reported total revenue of $717 billion for 2025, an increase of 12% from $638 billion in 2024. Operating income rose 17% to $80 billion from $69 billion. Free cash flow, however, dropped from $38 billion to $11 billion as spending on property and equipment surged by $50.7 billion year over year, largely tied to AI-related investments.
The company’s in-house AI chip portfolio—including Graviton, Trainium and Nitro—has reached an annual revenue run rate exceeding $20 billion, with triple-digit year-over-year growth. Jassy said that at scale, Trainium is expected to save tens of billions of dollars in capital expenditures each year while adding several hundred basis points to operating margins.
AWS reported a revenue run rate of $142 billion in the fourth quarter of 2025, reflecting 24% year-over-year growth. Jassy said demand for cloud infrastructure continues to exceed available capacity, leaving some customer demand unmet.
In its retail segment, Amazon introduced Amazon Now, a rapid-delivery service offering thousands of products within about 20 minutes. The service is seeing order growth of 25% month over month in India, where Amazon operates more than 360 micro-fulfillment centers. The company’s grocery division generated more than $150 billion in gross sales in 2025, making Amazon the second-largest grocery retailer in the United States.
Amazon’s Prime Air drone delivery program aims to reach communities representing 30 million customers by the end of the year and is targeting half a billion deliveries by the end of the decade. The company has built more than 85 Same-Day Fulfillment Centers across the U.S. and has already delivered more than 500 million same-day orders in 2026.
Amazon Leo, the company’s low Earth orbit satellite network, currently has more than 200 satellites in orbit. It has secured revenue commitments from Delta Air Lines (NYSE:DAL), which plans to begin offering the service on 500 aircraft in 2028. Additional customers include JetBlue, AT&T (NYSE:T), Vodafone, and NASA.
Jassy added that a significant portion of the AWS capital expenditures planned for 2026 is already backed by customer commitments, including a deal worth more than $100 billion with OpenAI.