Amazon has unveiled plans to invest $200bn (£147.7bn) in artificial intelligence and infrastructure, marking a sharp escalation in spending and making it the latest US tech giant to double down on AI.
The figure far exceeds the $125bn Amazon spent on AI last year and appeared to unsettle investors. The company’s shares fell nearly 9% in morning trading on Friday after the announcement.
Amazon’s move comes as the biggest names in Big Tech — Amazon, Meta, Google and Microsoft — collectively plan to invest around $650bn in AI and related projects this year. However, concerns are growing among investors and industry leaders that the rapid influx of capital risks inflating an AI bubble.
Reporting its full-year results on Thursday, Amazon said its investment would span AI, chips, robotics and low-Earth-orbit satellites. Chief executive Andy Jassy told analysts that the majority of the spending would be directed toward AI, describing it as “an unusual opportunity” with strong long-term profit potential.
“I passionately believe every customer experience we have today will be reinvented by AI,” Jassy said. “We’re going to invest aggressively.”
Despite the optimism, investors are increasingly wary about the scale of AI spending and how long it will take for returns to materialise. Shares in Meta and Microsoft also fell this week, dragging down broader markets.
Mary Therese Barton, chief investment officer at Pictet Asset Management, told the BBC there were “certainly jitters” among investors. She said the surge in spending had become “a wake-up call” over whether AI investments would deliver meaningful returns.
Late last year, the Bank of England warned that major US tech firms could face a “sharp correction” in valuations, comparing current market conditions to those seen ahead of the dotcom crash in the early 2000s.
Similar warnings have come from industry leaders. Cisco chief executive Chuck Robbins said the shift to AI would be “bigger than the internet” but cautioned that the current market could be a bubble, with some companies failing to survive. JPMorgan Chase boss Jamie Dimon also warned that some AI investment would “probably be lost.”
Amazon’s chief financial officer, Brian Olsavsky, said the company was seeking cost reductions elsewhere as AI spending accelerates. The company has cut 30,000 jobs since October, including 16,000 layoffs last week.
Other tech leaders pursuing AI investment have echoed similar messages. Meta chief executive Mark Zuckerberg said in January that the company plans to spend up to $135bn this year, nearly double last year’s figure, focusing on data centres, AI training and chip purchases. He also noted that AI is reducing the need for large technical teams and predicted 2026 would mark a major shift in how people work.
Google chief executive Sundar Pichai said his company would spend even more, with capital expenditure set to more than double to $185bn, driven by expanded AI infrastructure such as servers and data centres. Microsoft, while not disclosing a full-year figure, has already spent more than $72bn on AI-related talent and infrastructure and has shown no sign of pulling back.
Markets reacted nervously to the heavy spending. The S&P 500, which hit a record high at the end of January, fell more than 1% on Thursday, marking its third consecutive day of losses, before recovering slightly in Friday morning trading.
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