Overview
- Amazon’s CEO Andy Jassy, in Thursday’s annual letter, set 2026 capital spending at about $200 billion, mostly for AWS data centers, power, and custom chips tied to AI.
- He said Amazon’s in‑house silicon business tops a $20 billion revenue run rate and could approach $50 billion if the company sells hardware to outside customers.
- Amazon is considering offering racks of Trainium accelerators to third parties as demand exceeds supply, with Trainium2 sold out and Trainium3 nearly fully reserved.
- Capacity pressure extends to CPUs as two large clients tried to buy all 2026 Graviton instance capacity and were refused, while AWS AI revenue has climbed above a $15 billion annual run rate.
- Heavy AI purchases cut free cash flow to $11 billion in 2025, and industry data from Barclays points to an 87.9% jump in hyperscaler capex this year as investors debate near‑term returns versus long‑term gains.