Amazon Lifts AI Capex to $220B as AWS Jumps 37%

Amazon increased its 2024 technology capital plan to $220 billion, focusing on artificial intelligence, after reporting a 37% year-over-year rise in second-quarter AWS revenue, the fastest pace in 18 quarters. The Seattle company released the update Thursday, and the stock climbed more than 9% after hours.

The budget is up from a previously planned $200 billion and well above the $128 billion spent last year. Higher memory chip costs are driving the larger outlay, which also covers robots, semiconductors and satellites.

Chief Executive Andy Jassy told investors the expanded plan still will not meet all demand this year. He added, “I believe this dynamic will also be true in 2027,” and, “the demand we already have for 2028 is striking.”

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AWS growth accelerated from 28% in the prior quarter to 37% in the April–June period. Jassy characterized AWS as “booming” and noted that Amazon’s AI and custom chip businesses each crossed annualized run rates above $25 billion.

For the quarter ended June 30, the company reported net income of $62.65 billion, or $5.75 per share, compared with $18.16 billion, or $1.68 per share, a year earlier. Net sales reached $200.6 billion, up from $167.7 billion.

For the current quarter, management projected net sales of $197 billion to $202 billion.

Operational updates highlighted faster delivery. Amazon recorded its quickest delivery speeds for Prime members in the first half of the year, with 40% more items arriving the same day or overnight compared with a year earlier. The company is rapidly opening smaller order-processing hubs in dozens of U.S. and international cities to enable deliveries in about 30 minutes. In health, new customers for the online pharmacy more than doubled in the first six months, and same-day prescription deliveries increased nearly fivefold. The annual Prime Day sale was held in June rather than July.

In April, Amazon announced expanded partnerships with OpenAI, Anthropic and Meta. Management pointed to those relationships, along with AI infrastructure and chip initiatives, as supporting demand for AWS services and generative AI workloads.

Industry peers offered mixed signals. Alphabet reported an 82% year-over-year increase in cloud revenue and raised its full-year capital spending outlook to a range of $195 billion to $205 billion. Microsoft reported stronger profit and cited solid Azure growth, without unveiling a major increase in planned AI investment.

Amazon also flagged external cost pressures that could affect retail margins, including higher tariffs linked to U.S. trade policies and rising shipping expenses as developments involving Iran influence oil and fuel prices.