Global technology heavyweight Amazon is gearing up for one of the most aggressive investment cycles in corporate history. The company has announced plans to spend up to ₹16.6 lakh crore in capital expenditure in 2026, sharply stepping up investments in artificial intelligence (AI) and cloud infrastructure. The announcement comes on the back of another robust quarter for Amazon Web Services (AWS), which continues to serve as the backbone of the company’s profitability even as competition in cloud computing and AI intensifies.
Amazon said revenue from Amazon Web Services jumped nearly 24% year-on-year in the December quarter, comfortably beating Wall Street expectations. The strong showing underscores the surging demand for AI-driven computing across industries, pushing the world’s largest cloud providers into an unprecedented investment race.
AWS posted quarterly revenue of about ₹2.95 lakh crore, above market estimates of roughly ₹2.90 lakh crore, accounting for nearly 17% of Amazon’s consolidated revenue. More importantly, operating profit at AWS climbed to around ₹1.03 lakh crore, delivering the bulk of Amazon’s overall earnings and lifting operating margins to approximately 35%.
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AI reshapes capital allocation
Amazon’s projected ₹16.6 lakh crore capex for 2026 is significantly higher than analyst estimates of around ₹12.4 lakh crore. The bulk of this spending will be channelled through AWS and directed towards AI infrastructure. Investments will span hyperscale data centres, custom-designed chips, advanced networking equipment and expanded power capacity to support the training and deployment of large language models.
Company executives said the scale of spending reflects “very high demand” for AI workloads—from Amazon’s own platforms as well as third-party customers building next-generation applications. While part of the investment will also support non-AI core workloads that are growing faster than anticipated, management acknowledged that artificial intelligence will absorb the largest share of capital outlay.
The sheer size of the planned expenditure highlights how AI has transformed Big Tech’s financial priorities, turning cloud computing from a steady, high-margin business into a capital-intensive battleground.
Rivals accelerate, pressure builds
Amazon remains the world’s largest cloud infrastructure provider in a market it pioneered nearly two decades ago. However, rivals are closing in rapidly. Microsoft has reported strong momentum in its Azure cloud platform, while Google has posted its fastest cloud revenue growth in years, largely driven by AI demand.
Alphabet recently said Google Cloud revenue surged sharply year-on-year, while Microsoft flagged AI workloads as a key growth engine. The competitive landscape has raised the stakes for Amazon, which is determined to stay ahead by building capacity in advance of demand.
In 2025 alone, AWS added nearly four gigawatts of computing capacity—double what it had three years earlier. Amazon expects to double that capacity again by the end of 2027, underscoring the long-term nature of its AI ambitions.
Partnerships with model builders
As part of its broader AI strategy, Amazon has rolled out new tools for developers and model builders, enabling deeper customisation of generative AI models during training. The company has also strengthened ties with leading AI firms such as OpenAI and Anthropic, positioning AWS as a preferred platform for large-scale model development.
Industry experts say these partnerships are critical to ensuring high utilisation of Amazon’s rapidly expanding infrastructure, helping justify the massive capital commitment and supporting long-term returns.
Investor confidence, long-term wager
Amazon has sought to reassure investors that the spending surge is strategic rather than speculative. Management has stressed that past investments in AWS have consistently delivered strong returns on invested capital, and that AI infrastructure is expected to follow a similar trajectory as adoption deepens across sectors such as retail, healthcare, finance and manufacturing.
Analysts note that while higher capital intensity could pressure free cash flow in the near term, AWS’s robust margins provide a cushion that few competitors can match. The bigger uncertainty, they add, lies in how quickly AI demand converts into durable, recurring revenue streams.
The bigger picture
Amazon’s ₹16.6 lakh crore AI-focused investment plan reflects a broader shift sweeping the global technology industry, where scale, speed and access to capital are becoming decisive competitive advantages. As cloud giants race to lay the foundations of the AI economy, the coming years are likely to test balance sheets, energy infrastructure and regulatory frameworks alike.
For Amazon, the message is unmistakable: leadership in the AI era will be won not just through software or models, but through sheer infrastructure muscle—and the company is prepared to spend heavily to stay ahead.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
