Amazon expects to spend about $220 billion in capital expenditures in 2026, up from its previous estimate of around $200 billion, as rising costs for artificial intelligence memory chips drive higher infrastructure spending.
Speaking during the company’s second-quarter earnings call, CEO Andy Jassy said the rising cost of memory has become a major factor in Amazon’s infrastructure spending as the company races to expand capacity for artificial intelligence workloads, Yahoo Finance reported.
“We now believe we will spend approximately $220 billion in cash capex in 2026,” Jassy said. “The higher cost of memory is pushing this number up from our prior estimate of about $200 billion.”
Jassy added that even with the higher investment, Amazon is unlikely to have enough computing capacity to satisfy customer demand next year.
“Even at that amount, we will not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027. In fact, the demand we already have for 2028 is striking,” he said.
The revised spending plan highlights how the AI boom continues to reshape investment priorities across the technology industry. Amazon Web Services (AWS), the company’s cloud computing division, remains the biggest recipient of those investments as businesses continue deploying generative AI applications that require vast amounts of computing power.
According to Reuters, Amazon’s capital expenditures are largely focused on expanding AI infrastructure, including new data centers, networking equipment and custom AI chips designed to power its cloud services.
Beyond data centers, Amazon is also investing in its in-house silicon, Project Kuiper satellite network and robotics technologies for its fulfillment operations, although AI infrastructure remains the largest driver of spending.
Jassy’s comments also underscore a growing constraint facing the AI industry: memory.
Unlike conventional DRAM, advanced memory technologies such as high-bandwidth memory (HBM) are essential for AI accelerators used to train and run large language models. Demand for these chips has surged alongside purchases of GPUs from companies including Nvidia, creating supply shortages that have pushed prices higher.
The comments could be viewed as a positive signal for memory manufacturers.
Amazon’s willingness to increase spending because of higher memory prices suggests hyperscale cloud providers remain prepared to pay premium prices to secure supply, a trend that could benefit leading memory producers such as Micron Technology, Samsung Electronics and SK hynix.
The world’s largest technology companies continue to ramp up AI spending despite the enormous costs involved.
According to estimates cited by Yahoo Finance, Amazon, Microsoft, Alphabet, Meta Platforms and Oracle are collectively expected to invest more than $700 billion in capital expenditures during 2026 as they compete to build AI infrastructure.
Analysts have said the spending race reflects expectations that enterprise demand for generative AI services will continue growing for years, requiring more computing power, advanced networking equipment and increasingly scarce memory chips.
