Amazon plans $200B AI push as Washington Post trims workforce
What's the story
Amazon has announced plans to invest a whopping $200 billion in artificial intelligence (AI) and robotics in 2026. The announcement comes just a day after the The Washington Post, owned by Amazon founder Jeff Bezos, revealed its decision to lay off nearly a third of its workforce. Despite this news, Amazon's fourth-quarter earnings report showed a 14% increase in revenue to $213.4 billion from $187.8 billion last year.
Investment strategy
Capital spending to be ramped up
Amazon CEO Andy Jassy announced the company's plan to ramp up capital spending from $125 billion last year to $200 billion in 2026. This is a much higher figure than Wall Street analysts' expectations of around $147 billion, according to FactSet. "We expect to invest about $200 billion in capital expenditures across Amazon in 2026," Jassy said, citing strong demand for existing offerings and opportunities like AI, chips, robotics, and low Earth orbit satellites.
Financial performance
AWS grows at fastest pace in 13 quarters
In the fourth quarter of fiscal year 2025, Amazon reported a net income of $21.2 billion or $1.95 per share. This is higher than last year's net income of $20 billion or $1.86 per share for the same period. Despite slightly missing Wall Street's expectations of $1.97 per share on sales of $211.4 billion, Amazon saw its cloud-computing business, Amazon Web Services (AWS), grow at its fastest pace in 13 quarters with revenue rising 24% to $35.6 billion.
Market impact
Bezos loses $9 billion as post layoff raises concerns
Bezos, who is the executive chair of Amazon's board of directors, saw his net worth drop by $9 billion (3.7%) after Amazon's disappointing earnings report. Shares fell nearly 9% in after-hours trading. Former Post executive editor Marty Baron expressed concerns over the layoffs at the newspaper, saying "the aspirations of this news organization are diminished" and predicting it could lead to fewer subscribers for the publication.