Amazon Doubles Down on AI Spending with $220 Billion Commitment

Amazon has increased its AI spending target to $220 billion for 2026, up from $200 billion previously. The tech giant cited higher memory costs as a reason for the increase.

This move comes as part of Amazon's earnings report, which saw the company break out of a sluggish period and now outperform the S&P 500 by over 10% year-to-date.

The increased spending is yielding tangible returns, with revenue growth outpacing capex growth. In Q2, Amazon delivered 20% year-over-year revenue growth, driven in large part by Amazon Web Services (AWS) hitting its highest growth rate in more than four years.

AWS has seen meaningful revenue growth acceleration as AI demand heats up, and the company's operating income surged from $10.2 billion to $16.6 billion year-over-year.