Amazon's AI Capex Explained: How the $220 Billion Build Reaches Cash Flow and Profit

A company that builds its own factories pays for them years before they earn anything. The accounts record that gap in two places. The cash leaves in the quarter the buildings and machines are bought, while the expense arrives later, spread across the years the assets are expected to work. A business in the middle of a large build can therefore report a record profit and spend more cash than it took in, both in the same quarter.

Reading such a company well means holding three figures apart. The first is the cash that went out the door for property and equipment, which is the capital expenditure. The second is the depreciation charge that follows it into the income statement over five, ten or forty years. The third is the cash left over after the spending. That is what the owners could in principle be paid, and it can be negative while profit is at a record.

Amazon is running the largest build in its history, and the three figures have separated further than at any point since the company was a bookseller borrowing to build warehouses. The cash budget for the year was raised in July, the cash left over turned negative, and the operating profit shown to shareholders rose by more than 40% in the same quarter.

On BloFin that share is held as the AMZNX/USDT Spot token or as the AMZNUSDT Perpetual, and a change to the capital budget moves both by the same percentage as it moves the share.

What is Amazon spending on AI, and where does the cash come from?

Amazon expects to spend about $220 billion of cash on capital expenditure in 2026. Its chief executive raised the figure from $200 billion on July 30, 2026, citing higher memory prices (source: CNBC, July 30, 2026). Purchases of property and equipment were $54.2 billion in the second quarter and $173.0 billion over twelve months (source: Amazon Q2 2026 Form 10-Q).

The $220 billion is a guide given on the earnings call, so it appears in the press and the call transcript, and in no filed document. The company first named $200 billion in February, held that figure in April, and raised it in July, and the stock traded on each of those three dates (source: CNBC, July 30, 2026). Even at $220 billion, the chief executive said, capacity would fall short of the demand the company has for 2026, and he believed the same would hold in 2027 (source: Fortune, July 30, 2026). The filed floor beneath the guide is one sentence in the quarterly report. Cash capital expenditures were $53.1 billion in the quarter, they "primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth)" and in fulfillment capacity, and the company expects both to increase in 2026 (source: Amazon Q2 2026 Form 10-Q). The annual figures behind that sentence, net of proceeds from asset sales and incentives, were $77.7 billion in 2024 and $128.3 billion in 2025 (source: Amazon 2025 Form 10-K).

The cash comes from the operating business first and from borrowing second. Over the twelve months to June 30, 2026 the business generated $161.4 billion from operations, which covered most of the $173.0 billion of purchases but not all of them (source: Amazon Q2 2026 Form 10-Q). The shortfall, plus the year's investments in AI companies, was met with debt, and long-term debt rose from $65.6 billion to $128.9 billion over the first half of 2026 (source: Amazon Q2 2026 Form 10-Q). That $63.3 billion of new debt carries an interest cost the equity now bears, worked through in how Amazon is financing the AI build. Of the drivers ranked in what moves Amazon's stock price, the capex guide produced two of this year's largest one-day moves, in February and July.

Where the money goes: Data centers, servers, chips, memory and power

The build buys four things in bulk: land and buildings for data centers, the servers and networking equipment inside them, the chips and memory in those servers, and electricity. At the end of 2025 the gross cost of Amazon's servers and networking equipment was $172.5 billion, from $113.2 billion a year earlier (source: Amazon 2025 Form 10-K).

The construction-in-progress line is the part of the build that is paid for but not yet in service, and it grew by more than half in a year (source: Amazon 2025 Form 10-K).

The segment split shows who is doing the spending. In the second quarter of 2026 Amazon added $63.9 billion of property and equipment on an accrual basis. AWS took $48.6 billion of that, three quarters of the total, against $12.1 billion for the North America retail segment and $2.5 billion for International (source: Amazon Q2 2026 Form 10-Q). A year earlier AWS had added $16.0 billion in the same quarter, so the cloud segment tripled its additions while the retail segments barely moved. Some of that $48.6 billion is the company's own Trainium and Graviton silicon. Its effect on AWS's cost of capacity is worked through in why Amazon builds its own AI chips. The satellite constellation sits in the same capital budget and is treated in Amazon Leo and the stock.

The $63.9 billion of additions is what was acquired and the $54.2 billion of purchases is what was paid for. The $10.7 billion increase in property and equipment acquired but not yet paid sits in accounts payable until the suppliers are settled (source: Amazon Q2 2026 Form 10-Q). Memory is the line that moved the July guide. The extra $20 billion was attributed to higher memory prices, which raise the cost of every server without adding a single rack (source: CNBC, July 30, 2026).

How capex reaches operating income: depreciation, useful lives and the tax effect

Capital expenditure reaches operating income as depreciation, an expense spread across the years an asset is expected to work. Amazon depreciates servers and networking equipment over five to six years and buildings over up to forty years. Its depreciation of property and equipment rose from $32.1 billion in 2024 to $41.9 billion in 2025 (source: Amazon 2025 Form 10-K).

Say you follow one quarter's servers into the accounts. Equipment bought in the second quarter of 2026 is paid for in cash that quarter and appears on the balance sheet at cost. It is then charged to expense in equal slices over five or six years, so the operating income of 2027, 2028 and 2029 will carry the cost of purchases made today. Take the year-end gross balance of $172.5 billion in servers and networking equipment and divide it by six, and the straight-line charge is $28.7 billion a year; divide by five and it is $34.5 billion. That is why the annual depreciation figure is now rising by nearly $10 billion a year even though most of the newest equipment has only begun to be expensed. The company reports the total charge and the segment split rather than the charge by asset class, so the straight-line figures are arithmetic on the gross balance and the $41.9 billion is the disclosure (source: Amazon 2025 Form 10-K).

The useful life is an estimate, and the company changed it in both directions within two years. From January 1, 2024 it lengthened the life of servers from five years to six. From January 1, 2025 it shortened the life of a subset of servers and networking equipment from six years back to five, citing "the increased pace of technology development, particularly in the area of artificial intelligence and machine learning" (source: Amazon 2025 Form 10-K). The 2025 change added $1.4 billion of depreciation for the year and cut net income by $1.0 billion, or $0.10 a share, and it fell mainly on AWS (source: Amazon 2025 Form 10-K). AWS's depreciation rose from $13.3 billion to $21.5 billion in 2025, an increase of 61%, while its revenue rose 20%. That gap is the cost of the build arriving in the margin.

Cash tax moves the other way, and it moves a lot. The 2025 tax law reinstated 100% accelerated depreciation on qualified property from January 20, 2025. The same equipment that is expensed over five years in the accounts is therefore deducted at once for federal tax. Amazon's cash taxes paid fell from $12.3 billion in 2024 to $8.3 billion in 2025, with the US federal portion falling from $7.6 billion to $2.8 billion (source: Amazon 2025 Form 10-K). In the second quarter of 2026 cash taxes were $2.7 billion against $4.8 billion a year earlier (source: Amazon Q2 2026 Form 10-Q). The deduction is a timing difference rather than a saving, and it is one reason the cash left after the build is less negative than the capital budget alone would suggest.

The power agreements and the derivative line inside AWS's margin

Electricity is the input the build cannot buy off a shelf, so Amazon has contracted for it decades ahead. Part of those contracts is carried as a derivative whose changes in value pass through AWS's operating income with no cash moving: about 270 million megawatt-hours at June 30, 2026, running about fifteen years (source: Amazon Q2 2026 Form 10-Q).

The agreements themselves are public because the counterparties file them. In June 2025 Talen Energy expanded its power purchase agreement with Amazon to 1,920 megawatts of nuclear power from its Susquehanna plant, running through 2042 with options to extend, for an AWS campus next to the plant (source: Talen Energy release, June 11, 2025). In October 2024 Amazon signed three agreements for small modular reactors. One is with Energy Northwest in Washington for four reactors of roughly 320 megawatts in a first phase, one is with the reactor developer X-energy, and one is with Dominion Energy in Virginia for at least 300 megawatts near its North Anna station (source: Amazon, October 16, 2024). Some capacity is leased. Cipher Mining, a company that began as a Bitcoin miner, signed a roughly $5.5 billion, fifteen-year lease with AWS in November 2025 for 300 megawatts of space and power for AI workloads. Capacity was due from July 2026 and rent from August 2026 (source: Cipher Mining release, November 3, 2025). The company's own summary is that AWS added 3.9 gigawatts of power capacity in 2025 and expects to double its total capacity by the end of 2027 (source: Amazon 2025 shareholder letter).

Amazon may settle some contracts in cash when it uses less power than it committed to, so they count as derivatives and are revalued every quarter. For the years beyond the first four to six, the valuation rests on management assumptions because there is little or no market data, which the company labels Level 3 (source: Amazon Q2 2026 Form 10-Q). The revaluation produced a net unrealized gain of $551 million in the second quarter of 2026 and $599 million for the first half, recorded within technology and infrastructure expense and mainly in AWS. The company states that these measurements "will not impact cash flows but may be material to our statements of operations" (source: Amazon Q2 2026 Form 10-Q). A holder comparing AWS's margin with a year earlier is therefore comparing a figure that now contains a valuation gain on electricity. The company's third-quarter guidance for operating income assumes no impact from these remeasurements at all (source: Amazon Q2 2026 results release).

Free cash flow under the one measure Amazon reports

Free cash flow is operating cash flow less purchases of property and equipment, net of proceeds from sales and incentives. On that measure Amazon reported an outflow of $7.6 billion for the twelve months to June 30, 2026, against an inflow of $18.2 billion a year earlier (source: Amazon Q2 2026 results release).

The series runs in one direction. Trailing-twelve-month free cash flow was $25.9 billion at the end of the first quarter of 2025, then $18.2 billion, $14.8 billion, $11.2 billion and $1.2 billion, and finally the $7.6 billion outflow at the end of the second quarter of 2026. Operating cash flow over the same six quarters rose from $113.9 billion to $161.4 billion (source: Amazon Q2 2026 results release). The release attributes the change to a $66.1 billion rise in net purchases that primarily reflects investments in artificial intelligence (source: Amazon Q2 2026 results release). The cash the business makes is at a record and so is the shortfall against the build, and the two facts are the same fact read from different lines. For the full year 2025 the company's letter to shareholders put free cash flow at $11 billion, down from $38 billion, and attributed the fall to a $50.7 billion increase in net purchases of property and equipment (source: Amazon 2025 shareholder letter).

The letter states that AWS "has to lay out cash for land, power, buildings, chips, servers, and networking gear in advance of when we can monetize it (typically 6-24 months before we start billing customers, depending on the component)". It adds that these assets have useful lives of thirty years or more for data centers and five to six years for equipment. In periods of very high growth, it says, free cash flow in the early years stays weak until the first tranches of capacity are earning (source: Amazon 2025 shareholder letter). The same letter says the company accepts weak free cash flow now for a larger surplus later. That is its stated expectation, and no result yet tests it (source: Amazon 2025 shareholder letter). A share that pays no dividend and whose buyback is unused, as set out in does Amazon stock pay dividends, has this cash-flow line as the only measure of what the owners are accumulating. A share priced on earnings and the same share priced on free cash flow now give two different answers, the gap that how Amazon stock is valued measures.

How Amazon's capex compares with Alphabet, Microsoft and Meta

Amazon spends the most of the four largest cloud builders, and it is the only one whose spending exceeded its operating cash flow over the latest half year. In the first six months of 2026 it bought $98.4 billion of property and equipment against $71.4 billion of operating cash flow, a ratio of 138% (source: Amazon Q2 2026 Form 10-Q).

Over the same six months Alphabet ran at 95% (source: Alphabet Q2 2026 results release). Meta ran at 77% (source: Meta Q2 2026 results release). Microsoft, whose fiscal year ends in June, ran at 63% over the twelve months to June 2026 (source: Microsoft fiscal 2026 fourth-quarter release).

Meta's own free-cash-flow definition also subtracts finance-lease payments, which were $1.8 billion in the half. Its guidance for 2026 capital expenditure including those leases is $130 billion to $145 billion (source: Meta Q2 2026 results release).

The gap behind Amazon is narrowing. Alphabet's purchases of $44.9 billion in the second quarter of 2026 exceeded its $39.1 billion of operating cash flow, a quarterly free cash outflow of $5.9 billion, even though its trailing-twelve-month figure remained a $53.3 billion inflow (source: Alphabet Q2 2026 results release). Amazon's quarterly figure had crossed a quarter earlier: in the first quarter of 2026 operating cash flow was $26.0 billion against $43.2 billion of net purchases, the difference between the half-year and second-quarter columns (source: Amazon Q2 2026 Form 10-Q). Its ratio had been climbing for longer. Purchases of $131.8 billion stood against $139.5 billion of operating cash flow for the full year 2025, a ratio of 94%, and six months later the half-year ratio was 138% (source: Amazon 2025 Form 10-K). Tesla builds factories with the same cash-first, revenue-later shape. Amazon and Tesla compared as stocks puts the two capital intensities side by side.

Is the AI build a repeat of the dot-com bubble? The 1999 record beside 2026

Amazon was building in 1999 and is building in 2026, and its own filings from both periods allow the comparison in figures. In 1999 it spent $287 million on fixed assets against $1.6 billion of sales, operations consumed $91 million of cash, and the net loss was $720 million (source: Amazon 2001 Form 10-K405).

The 1999 build was paid for with borrowed money because there was no operating cash to pay for it. The company raised $1.3 billion of long-term debt that year, lost a further $1.4 billion in 2000, and expected positive operating cash flow, "and possibly free cash flow", only for 2002 (source: Amazon 2001 Form 10-K405). The share price recorded the sequence. It reached a high of $113.00 in the fourth quarter of 1999 (source: Amazon 2000 Form 10-K405). It touched a low of $5.97 in the third quarter of 2001, a fall of 94.7% from the one figure to the other (source: Amazon 2001 Form 10-K405). A 94.7% fall is the drawdown against which every later one is measured in Amazon's stock price history and cycles.

The 2026 figures differ in kind on three lines. Operations generated $161.4 billion of cash over the last twelve months rather than consuming it, and operating income was $27.5 billion in the second quarter alone (source: Amazon Q2 2026 results release). The spending is also set against customer contracts: commitments for future AWS services not yet recognized as revenue stood at about $496 billion at June 30, 2026, with a weighted-average remaining life of 6.4 years (source: Amazon Q2 2026 Form 10-Q). The company's letter makes the same argument in its own voice. It states that Amazon is "not investing approximately $200 billion in capex in 2026 on a hunch", that customer commitments cover a substantial portion of the AWS spending, and that it expects to monetize much of that spending in 2027 and 2028 (source: Amazon 2025 shareholder letter). What the two builds share is the accounting shape, cash out first and revenue later. What they do not share is the source of the cash. Whether the contracted demand justifies the price of the share is a valuation question, taken up in is Amazon stock a good investment.

Why the capex guide is the number the market trades

The capital-expenditure guide moves the share more than the quarter's results because it sets the next year's free cash flow and margin, and it is given on the call rather than in the release. On February 6, 2026, the day after the $200 billion figure was first given, the stock fell almost 6% (source: CNBC, February 6, 2026).

On July 31, 2026, the day after the raise to $220 billion and the 37% AWS growth figure, the stock closed at $271.58, up 15.32%, on 129 million shares (source: Stock Analysis). The two days show the same number read two ways. In February a larger budget was read as a larger drain on cash, with the revenue to justify it still to come. In July the same increase arrived beside the fastest AWS growth in eighteen quarters and a chips business past a $25 billion run rate, so the spending was priced as capacity that customers had already contracted (source: Amazon Q2 2026 results release). The release itself guides only net sales and operating income. Its third-quarter range of $22.5 billion to $26.5 billion of operating income assumes no energy-contract remeasurements and no new acquisitions or settlements, so the capex figure the market trades has to be taken from the call (source: Amazon Q2 2026 results release). That order, the release first and the capex figure on the call, is the reading order how Amazon earnings reports work follows. A position held through that hour carries the whole overnight gap, which trading Amazon around earnings sizes. The two release-day moves are the size a holder of the AMZNX/USDT Spot pair sees in the token, and the pair's live price and order book are on its page.

What a guide day does to AMZNX and the AMZNUSDT Perpetual

Say you hold AMZNX on a guide day. The token is backed one-for-one by a share of Amazon held in custody and tracks its price, as what tokenized Amazon (AMZNX) is sets out. A 15% move in the share on the Nasdaq is therefore a 15% move in the token, with no dividend and no buyback to soften or add to it. At 12:57 UTC on September 17, 2026 the AMZNX/USDT pair traded at 251.83, with a 24-hour range of 244.73 to 251.89. The Nasdaq close the previous evening was $245.96, and the pre-market print at 8:54 AM Eastern on September 17 was $251.60 (source: Stock Analysis). The build leaves the token's entitlement unchanged, because a share that pays nothing carries the same claim whether the cash was spent on servers or kept. What changes is the price at which that claim trades, and the guide is the input that moves it most.

A holder of the perpetual sees the same price and one figure the spot holder never sees. At 12:58 UTC the AMZNUSDT Perpetual traded at 251.77 against an index price of 251.65, with a funding rate of +0.0211% settled every eight hours between long and short positions. Funding is paid between traders rather than by the company. A leveraged position held through a guide day therefore carries the price move times the leverage, plus or minus the funding, and nothing of the company's cash flow. The arithmetic of that position, including the margin a 15% overnight move consumes at each leverage level, is worked through in how to trade Amazon with leverage.

Looking to gain exposure to Amazon? To get started, you'll need to first create a BloFin account, fund your account with cryptocurrency, and navigate to the AMZNX/USDT Spot trading page or AMZNUSDT Perpetual page.

Frequently asked questions

What are Amazon's capital expenditures by year?

Purchases of property and equipment were $83.0 billion in 2024 and $131.8 billion in 2025 (source: Amazon 2025 Form 10-K). Over the twelve months to June 30, 2026 they were $173.0 billion (source: Amazon Q2 2026 Form 10-Q). For 2026 the company has guided to about $220 billion, a figure given on its July 30, 2026 earnings call and raised from the $200 billion first stated in February (source: CNBC, July 30, 2026). Those are gross figures; net of proceeds from asset sales and vendor incentives, the basis of the company's own cash capital expenditure and free cash flow figures, they were $77.7 billion, $128.3 billion and $169.0 billion.

Which company has the highest capex?

Amazon, on both the latest half year and the latest full year. Its purchases of property and equipment were $98.4 billion in the first half of 2026 (source: Amazon Q2 2026 Form 10-Q). Alphabet's were $80.6 billion over the same six months (source: Alphabet Q2 2026 results release). Meta's were $49.1 billion (source: Meta Q2 2026 results release). Microsoft's $115.9 billion is a twelve-month figure, for its fiscal year to June 2026 (source: Microsoft fiscal 2026 fourth-quarter release). For calendar 2025 Amazon bought $131.8 billion of property and equipment (source: Amazon 2025 Form 10-K). Alphabet's purchases for the same year were $91.4 billion (source: Alphabet 2025 Form 10-K). Meta's were $69.7 billion, the lowest of the three (source: Meta 2025 Form 10-K).

Does negative free cash flow mean Amazon is losing money?

It means the company spent more cash on property and equipment than its operations generated, while remaining profitable on every other measure. In the second quarter of 2026 operating income was $27.5 billion and net income $62.6 billion, the latter lifted by gains on investments, in the same period that trailing free cash flow was an outflow of $7.6 billion (source: Amazon Q2 2026 results release). Profit charges assets to expense over their working lives; free cash flow records the cash paid for them in the quarter they were bought.

Does Amazon's capex figure include leased data centers?

Leased assets sit outside the capital-expenditure line, because they arrive on the balance sheet without a purchase, and they sit outside the company's free-cash-flow measure as well. Over the twelve months to June 30, 2026 Amazon took on $24.9 billion of assets under operating leases and $4.0 billion of property and equipment under finance leases, and it repaid $1.6 billion of finance-lease principal (source: Amazon Q2 2026 Form 10-Q). A comparison with a company that subtracts lease payments from its free cash flow, as Meta does, should allow for that difference.

Why does Amazon's capex look different in the cash-flow statement and the segment note?

The cash-flow statement records what was paid and the segment note records what was acquired. A quarter's equipment is often installed before the supplier is paid. The gap goes through accounts payable: the balance of property and equipment acquired but not yet paid was $27.0 billion at the end of 2025, up from $16.8 billion a year earlier (source: Amazon 2025 Form 10-K). When the build accelerates, the accrual figure runs ahead of the cash figure. When it slows, the cash figure catches up as the invoices are settled.

Researched and written by the BloFin Academy editorial team with AI-assisted drafting. All facts independently verified. Primary sources include Amazon's second-quarter 2026 Form 10-Q and results release, its 2025 Form 10-K, its 2025 letter to shareholders, its annual reports for 2000 and 2001 filed with the SEC, the results releases of Alphabet, Meta and Microsoft filed with the SEC, the Talen Energy and Cipher Mining releases filed with the SEC, Amazon's October 2024 nuclear-energy announcement, CNBC and Fortune reports of the July 30, 2026 earnings call, Stock Analysis for market data, and BloFin's AMZNX/USDT and AMZNUSDT pages, current as of September 2026.

Nothing in this article constitutes financial advice, and nothing in it predicts Amazon's future spending, cash flow or share price or recommends buying, selling or holding Amazon in any form. The $220 billion figure is a guide given on an earnings call and has been revised twice this year; the useful lives, the energy-contract valuations and the tax deductions described here are estimates that the company can change, and free cash flow can stay negative for longer than a build's revenue takes to arrive. AMZNX tracks the share's price and carries the issuer's and custodians' risk in addition, and a leveraged position in AMZNUSDT held through a guide day can be liquidated by a single session's move. Past performance does not indicate future results. Do your own research and consider your risk tolerance before you trade on BloFin.