Amazon Joins Big Tech AI Spending Surge as Wall Street Worries About Data Center Costs

Amazon on Thursday announced a sharp increase in capital expenditures for artificial intelligence, joining Microsoft, Alphabet, and Meta in a spending blitz that is rattling investors. The e-commerce and cloud giant said it would pour billions more into data centers and AI infrastructure, even as its stock price slipped in after-hours trading. Wall Street is growing concerned that the massive outlays may not pay off quickly enough, especially as the costs of building and powering advanced AI systems continue to climb. The move underscores how the biggest tech companies are locked in an arms race to dominate generative AI, with Amazon aiming to keep pace in the cloud computing market where it competes with Microsoft's Azure and Google Cloud. Analysts note that while AI demand is strong, the sheer scale of investment—likely to exceed $100 billion annually across the industry—is testing investor patience. Amazon's announcement follows similar moves by rivals, all of which have seen their share prices pressured in recent weeks. The company did not provide a specific figure, but executives signaled that spending would rise significantly from last year's levels. For now, Amazon is betting that its cloud customers will eventually pay a premium for AI services, but the payoff remains uncertain. The message to Wall Street: expect tighter margins in the short term as the AI infrastructure buildout accelerates.