Amazon Pours $220 Billion Into AI as AWS Demand Outpaces Supply

On Thursday, Amazon raised its 2026 cash capital expenditure forecast to about $220 billion, up from roughly $200 billion. The change reflects higher memory prices rather than new data center construction. CEO Andy Jassy said AI demand will continue to outpace supply into 2027, and bookings for 2028 are already "staggering."

AWS posted one of its strongest quarters in years. Revenue grew 36.7 percent year over year to $42.2 billion, the fastest pace in eighteen quarters. Operating income hit $16.6 billion, and the annual run rate now stands at $169 billion. AI and custom silicon each contribute more than $25 billion in annualized revenue.

AWS backlog reached $496 billion, growing at a triple-digit rate year over year. Jassy said 2026 capacity still cannot meet all customer demand, and the gap will persist into 2027. The company plans to double its power capacity by the end of 2027, and most of that new capacity is already reserved by customers.

Both Anthropic and OpenAI have made multi-year, multi-gigawatt commitments to Amazon's Trainium processors. Amazon is now exploring selling Trainium outside AWS, after customers asked to deploy the chip in third-party data centers. Analysts called the move a notable step that could challenge the dominance of Nvidia and AMD in AI training silicon.