Amazon's $220 Billion AI Build Sparks Debt Market Concerns

Amazon's massive AI spending spree is putting pressure on Europe's corporate debt market. The company's $220 billion budget for AI infrastructure has pushed its planned 2026 capital expenditures to a staggering number, equivalent to about 130% of AWS's annualized quarterly revenue.

The European Central Bank (ECB) warns that this borrowing could crowd out weaker companies and drive up financing costs. As Amazon continues to spend heavily on AI, its free cash flow remains negative at $7.6 billion.

Despite the financial strain, Amazon's growth is strong, with revenue soaring 20% in the second quarter to $200.6 billion. AWS sales also rocketed 37% to $42.2 billion, while operating income hit $16.6 billion.