Amazon said on Thursday that it would spend $200 billion this year on data centers, satellites and other big-ticket items as it invests heavily in the race for artificial intelligence.
The eye-popping dollar figure, which topped Wall Street’s predictions by $50 billion, was the latest in a series of announcements by big technology companies that they plan to dial up their A.I. investments this year.
Despite investors’ worries that the hundreds of billions those giants are spending on A.I. data centers could take years to pay off, the companies show little sign of slowing down. This week, Google’s parent, Alphabet, said it would spend as much as $185 billion this year, and Meta said last week that its capital expenses, in large part to support A.I., could reach $135 billion.
Investors appeared to be spooked by Amazon’s plans, and the company’s share price fell more than 10 percent in after-hours trading.
Amazon, which otherwise reported a strong holiday quarter, was just the latest big technology company to test investors’ nerves with its spending. Last week, Microsoft reported sales and profits that surpassed Wall Street’s expectations, but its share price also dipped 10 percent after its capital spending was higher than predicted and its cloud computing sales grew slightly less than investors had anticipated.
Industry executives have made it clear that they believe spending too little on A.I. would be a much bigger mistake than spending too much, even as the combined annual capital spending plans of Amazon, Microsoft, Meta and Google race past half a trillion dollars.
“I think this is an extraordinarily unusual opportunity to forever change the size” of Amazon, Andy Jassy, the company’s chief executive, said in a call with Wall Street analysts on Thursday.
Amazon and its peers have said they still don’t have enough data centers up and running to meet the pent-up demand for A.I. from customers. And they argue that when companies adopt A.I., they also use more traditional cloud services, sending more money into other parts of their operations.
“You don’t have to be Sherlock Holmes to figure out that A.I. has driven these changes,” John Dinsdale, chief analyst at Synergy Research Group, said in a note on Thursday.
On Amazon’s call with investors, Wall Street analysts pressed executives to explain why they believe their enormous bets will pay off. “That’s the debate in the market today,” said Mark Mahaney, an analyst at the investment bank Evercore. “Help us get to your level of confidence.”
Mr. Jassy said that customers were snapping up Amazon’s A.I. computing capacity just as soon as it becomes available, and that customers were moving more data to the clouds so they could power A.I.
“We just have a lot of growth, and a lot of demand,” he said. Mr. Jassy did not directly answer questions about whether there was a red line that would make the company slow its spending.
Amazon’s big investments overshadowed a strong quarter. The company reported record sales, an indication that its cloud computing business capitalized on the A.I. boom while its retail operation experienced a resilient holiday season.
Amazon said its sales passed $200 billion for the first time, reaching $213.4 billion in the last three months of the year, more than Wall Street expected and up 14 percent from a year earlier. Profit grew 6 percent to $21.2 billion, slightly less than Wall Street expected.
Mr. Jassy said in a statement that “strong demand for our existing offerings and seminal opportunities like A.I., chips, robotics and low earth orbit satellites” were the reasons for the spending spree.
The company cautioned that its costs would eat into profit in the current quarter, with operating profits potentially declining to as little as $16.5 billion, about $2 billion less than a year ago.
Amazon’s cloud computing division saw sales grow 24 percent to $35.6 billion as the business gained momentum after initially lagging in the A.I. race. It was the fastest growth in about three years.
For the past several quarters, Amazon has been racing to open more data centers to meet demand. In late October, Amazon opened its largest data center, in Indiana, to begin serving the A.I. company Anthropic, which Amazon has also invested in.
Amazon spent more than $38 billion on capital expenditures in the quarter, bringing its total for the year to more than $128 billion. That has largely gone to building data centers, though it also includes warehouses and other facilities for its e-commerce business.
Amazon’s willingness to invest in what it believes to be its future stands in stark contrast to major cost cutting at The Washington Post, which is owned by Amazon’s founder, Jeff Bezos, who is the board chair. The Post slashed its newsroom on Wednesday, laying off more than 300 of the roughly 800 journalists.
Mr. Bezos is Amazon’s largest shareholder, with more than $200 billion worth of stock. He is also investing heavily in his rocket company, Blue Origin, which is competing with Elon Musk’s SpaceX for government contracts.
While investors have focused on Amazon’s cloud computing more than ever, Amazon’s retail business has become more profitable than in the past.
Despite worries about the impact of tariffs and an uncertain job market, consumer spending held relatively strong in the holiday season. The number of items that Amazon sold in the final quarter of 2025 grew 12 percent, a higher rate than in 2024, before President Trump unveiled his tariff plans. In North America, sales topped $127 billion in sales, up 10 percent.
The most profitable parts of Amazon’s retail business, including advertising, have been growing. It had $21.3 billion in ad sales for the quarter.
Amazon has also been cutting costs, by making its warehouse operations more efficient and adding to its retail business without expanding its work force. Amazon ended the year with 1.576 million employees, up just 1 percent.
Last week, Amazon announced that it was closing its Amazon Go cashier-less convenience stores and its Amazon Fresh grocery stores. Layoffs from those stores surpassed 7,500 people, according to state filings.
In October and January, the company has also laid off a combined 30,000 corporate and technology employees, a move that Mr. Jassy has said was driven by a desire to reduce bureaucracy. Engineers accounted for roughly half of those who lost their jobs in Washington, Amazon’s home state, according to disclosures filed there.
Karen Weise writes about technology for The Times and is based in Seattle. Her coverage focuses on Amazon and Microsoft, two of the most powerful companies in America.
The post Amazon’s $200 Billion Spending Plan Raises Stakes in A.I. Race appeared first on New York Times.
