Amazon Joins Big Tech’s Massive AI Spending Wave
Amazon shares dropped more than 11% in after-hours trading after the company announced a dramatic increase in spending on artificial intelligence. The sell-off followed Amazon’s disclosure that it plans to invest $200 billion in 2026, largely to expand AI infrastructure.
That figure marks a steep jump from the $125 billion Amazon spent last year. Moreover, it places the company at the top of Big Tech’s AI spending leaderboard, surpassing rivals in sheer capital commitment.
Andy Jassy Bets Big on Artificial Intelligence
Amazon Chief Executive Andy Jassy left little doubt about the company’s priorities. During an earnings call, he said Amazon will channel most of its capital spending toward AI development.
Jassy described AI as a rare inflection point. He argued that artificial intelligence will reshape every Amazon customer experience. As a result, Amazon plans to invest aggressively, even if near-term market reaction turns negative
Investors Worry About Returns on AI Investment
Despite Amazon’s strong revenue and profit performance, investors reacted cautiously. Many shareholders now want clearer timelines for monetizing costly AI projects.
In addition, Amazon’s finance chief confirmed the company is cutting costs elsewhere to fund its AI push. Recently, Amazon eliminated 30,000 jobs across two major layoff rounds. That move highlights the internal trade-offs required to sustain such heavy investment.
Meta, Google, and Microsoft Also Ramp Up AI Budgets
Amazon does not stand alone. Other tech giants have also accelerated AI spending plans.
Meta plans to spend up to $135 billion this year. Chief executive Mark Zuckerberg says the money will support AI model training, data centers, and advanced chips. At the same time, Meta uses AI internally to reduce staffing needs on large projects.
Meanwhile, Google expects capital spending to exceed Meta’s total. CEO Sundar Pichai said Google will more than double investment to $185 billion, focusing on servers and AI-focused data centers.
Microsoft has already spent more than $72 billion on AI talent and infrastructure. Notably, Microsoft executives have given no signal that spending will slow.
Big Tech AI Spending Tops $650 Billion in 2026
Together, Amazon, Meta, Google, and Microsoft expect to spend roughly $650 billion this year on AI and related technologies. That includes chips, robotics, cloud infrastructure, and next-generation data centers.
However, markets now question whether revenue growth will keep pace with investment. In recent days, shares of all four companies have declined, even as earnings improved.
Broader Market Feels the Pressure
The S&P 500, which includes all major AI spenders, fell more than 1% in the latest session. The decline extended a pullback from record highs reached earlier in the year.
Clearly, investors remain uneasy. They want proof that AI spending will translate into durable profits rather than prolonged margin pressure.
Bottom Line
Amazon’s $200 billion AI investment plan underscores how intensely Big Tech is betting on artificial intelligence. Yet the market response shows rising skepticism. Until companies deliver clearer returns, AI ambition alone may not satisfy investors.
