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Amazon has joined the global AI arms race. The tech giant announced it will invest a staggering $200 billion in artificial intelligence and infrastructure this year.
This figure dwarfs the $125 billion Amazon spent in 2025. Despite this ambition though, investors were left rattled, sending shares down nearly 9% as the market weighed the cost of these massive bets.
This move follows Google’s own record-breaking announcement, which we reported earlier today on Tech Digest. Google revealed a $185 billion spending plan as it fights to protect its search empire from ChatGPT.
While Google is primarily focused on countering direct chatbot threats, Amazon’s $200 billion war chest is more diversified. It covers AI chips, robotics, and the Kuiper satellite network.
The combined spending of Amazon, Google, Meta, and Microsoft is now set to reach $650 billion this year. This “nuclear” investment level has prompted warnings from finance leaders.
JPMorgan boss Jamie Dimon and the Governor of the Bank of England have both cautioned that the industry might be in a bubble.
Nevertheless, Amazon CEO Andy Jassy remains undeterred. He told analysts that every customer experience will eventually be reinvented by AI. Like Google, Amazon is funding this transition through aggressive cost-cutting. The company recently laid off another 16,000 workers to help fuel its digital transformation.
Both Amazon and Google are operating on the belief that under-investing is a bigger risk than over-spending. However, Wall Street is increasingly demanding a clear path to profitability. While Google’s revenue broke $400 billion to help soften the blow, Amazon’s stock hit suggests the market’s patience for unproven AI gambles is wearing thin.
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