We’re not going to be conservative

Amazon CEO Andy Jassy on Thursday released his annual shareholder letter and once again made the case to Wall Street investors that the company’s huge investments in artificial intelligence are worthwhile.

“We’re not going to be conservative in how we play this — we’re investing to be the meaningful leader, and our future business, operating income, and [free cash flow] will be much larger because of it,” Jassy wrote.

The company disclosed in February that it expects to spend roughly $200 billion this year on capital expenditures, with the lion’s share going toward AI infrastructure, including data centers, chips and networking equipment.

That’s more than any of its tech peers, and a nearly 60% increase from last year.

Amazon shares have struggled so far this year as investors question the company’s aggressive AI spending plans and grow increasingly impatient about when the investments will pay off. The stock has slid more than 4% year to date.

Jassy has said that Amazon needs the capital to go after “a once-in-a-lifetime opportunity” and to keep pace with “very high demand” for the company’s AI compute.

On Thursday, he reiterated that argument, and also disclosed for the first time that AI revenue in its cloud computing segment has hit a $15 billion annual run rate.

Amazon’s custom chip business, which includes Graviton processors, Trainium AI chips and Nitro architecture, has notched an annual revenue run rate of more than $20 billion, and is “growing triple digit percentages” year over year, Jassy said.

“We’re not investing approximately $200 billion in capex in 2026 on a hunch,” Jassy wrote. He added that Amazon has received customer commitments for “a substantial portion” of that spend and expects to monetize most of it next year and in 2028.