Amazon can't build AI capacity fast enough, throws another $200B at the problem
(2026/02/06)
- Reference: 1770343996
- News link: https://www.theregister.co.uk/2026/02/06/amazon_earnings_q4_2025/
- Source link:
AWS has an open cash spigot for AI infrastructure, with Amazon CEO Andy Jassy telling investors the company has been monetizing compute capacity as fast as it brings it online and it plans to double capacity by the end of 2027.
"We’re growing at really an unprecedented rate. Yet, I think every provider would tell you, including us, that we could actually grow faster if we had all the supply that we could take,” he said on the company’s Thursday earnings call. “And so we are being incredibly scrappy around that. If you look in the last 12 months, we added 3.9 gigawatts of power. Just for perspective, that’s twice what we had in 2022....We expect to double it again by the end of 2027."
Jassy said Amazon plans to add datacenter capacity “as fast as we can” to meet the demand from customers to place their workloads on AWS and train their data for the AI era. While AWS's 35 percent operating margins through the end of the year will fluctuate as the company spends cash on building infrastructure, Jassy sees a clear path to win a return on that investment.
[1]
"If you look at the capital we're spending and intend to spend this year, it's predominantly in AWS. And some of it is for our core workloads, which are non AI workloads because they're growing at a faster rate than we anticipated. But most of it is on AI," Jassy said. "What we’re continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it. So it's just a very unusual opportunity."
[2]
[3]
Jassy said AI will mean every customer experience is reimagined, and new ones will emerge to become “the norm.”
The CEO said customers that use AI in expansive ways are putting their data and applications in the cloud.
[4]
"Those are all big tailwinds pushing people towards the cloud. So we’re going to invest aggressively here and we're going to invest to be the leader in this space as we have been for the last number of years. We have, I think, a fair bit of experience over the years of forecasting demand signals and doing it in such a way that we don’t have a lot of wasted capacity … this isn’t some quixotic topline grab. We have confidence that these investments will yield strong returns on invested capital. We’ve done that with our core AWS business. I think that will very much be true here as well."
AWS generated sales of $35.6 billion in the fourth quarter, up 24 percent year-over-year, and $128.7 billion in sales for the year, up 20 percent. As of the fourth quarter ending Dec. 31, AWS had an annualized run rate of $142 billion, up from $80 billion in 2022. Jassy said Amazon expects to spend $200 billion in 2026, with most of that headed to AWS.
Despite double-digit gains and 35 percent margins at AWS, Amazon stock was down as much as 11.5 percent in after hours trading, joining a selloff that has begun to roil the entire tech sector.
[5]AWS says you're on your own if media codec patent owners come knocking
[6]Amazon's European datacenter buildout blows a breaker as grid connection wait list hits 7 years
[7]Amazon CEO Andy Jassy goes wobbly on AI bubble possibility
[8]AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention
Even after Jassy delivered his impassioned defense of the AWS datacenter spending, and his confidence in the value that would return, Doug Anmuth, analyst with JP Morganm, wanted to know if he had set any "financial guardrails" on spending. If Amazon has any such protections Jassy didn’t mention them, but continued to talk up spending "aggressively."
"I think this is an extraordinarily unusual opportunity to forever change the size of AWS and Amazon as a whole," Jassy said. “And so we see this as an unusual opportunity, and we are going to invest aggressively here to be the leaders."
[9]
Jassy said one big advantage AWS has over competitors is its homegrown chips. The Trainium accelerators and Graviton CPUs are already delivering annualized revenue run-rate of $10 billion, and that’s growing at triple-digit percentages year to year.
Jassy said the company’s Trainium2 chips are used to power Project Rainier, which has linked more than 500,000 of them into what he called the world’s largest operational AI compute cluster. He said Anthropic is using that to train its AI models.
Trainium3 chips are already in the market, with the entire supply expected to be committed to workloads by mid-2026. Trainium4 will arrive in 2027 and bring six times the compute performance and four times the memory bandwidth of the Trainium3.
"Trainium is a multibillion dollar annualized run rate business at this point, and it's fully subscribed," he explained. "Customers are really thirsty for better price performance and Trainium has 30 to 40 percent better price performance than comparable GPUs, so it’s very compelling to customers." He added that the company is already having discussions about Trainium5. ®
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[5] https://www.theregister.com/2026/02/04/aws_codec_patent_holders/
[6] https://www.theregister.com/2026/02/03/amazon_power_europe/
[7] https://www.theregister.com/2026/01/20/amazon_ceo_andy_jassy_ai_bubble/
[8] https://www.theregister.com/2026/01/05/aws_price_increase/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aYV1dPSaJC9w3xhO8DHeTQAAAc8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
"We’re growing at really an unprecedented rate. Yet, I think every provider would tell you, including us, that we could actually grow faster if we had all the supply that we could take,” he said on the company’s Thursday earnings call. “And so we are being incredibly scrappy around that. If you look in the last 12 months, we added 3.9 gigawatts of power. Just for perspective, that’s twice what we had in 2022....We expect to double it again by the end of 2027."
Jassy said Amazon plans to add datacenter capacity “as fast as we can” to meet the demand from customers to place their workloads on AWS and train their data for the AI era. While AWS's 35 percent operating margins through the end of the year will fluctuate as the company spends cash on building infrastructure, Jassy sees a clear path to win a return on that investment.
[1]
"If you look at the capital we're spending and intend to spend this year, it's predominantly in AWS. And some of it is for our core workloads, which are non AI workloads because they're growing at a faster rate than we anticipated. But most of it is on AI," Jassy said. "What we’re continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it. So it's just a very unusual opportunity."
[2]
[3]
Jassy said AI will mean every customer experience is reimagined, and new ones will emerge to become “the norm.”
The CEO said customers that use AI in expansive ways are putting their data and applications in the cloud.
[4]
"Those are all big tailwinds pushing people towards the cloud. So we’re going to invest aggressively here and we're going to invest to be the leader in this space as we have been for the last number of years. We have, I think, a fair bit of experience over the years of forecasting demand signals and doing it in such a way that we don’t have a lot of wasted capacity … this isn’t some quixotic topline grab. We have confidence that these investments will yield strong returns on invested capital. We’ve done that with our core AWS business. I think that will very much be true here as well."
AWS generated sales of $35.6 billion in the fourth quarter, up 24 percent year-over-year, and $128.7 billion in sales for the year, up 20 percent. As of the fourth quarter ending Dec. 31, AWS had an annualized run rate of $142 billion, up from $80 billion in 2022. Jassy said Amazon expects to spend $200 billion in 2026, with most of that headed to AWS.
Despite double-digit gains and 35 percent margins at AWS, Amazon stock was down as much as 11.5 percent in after hours trading, joining a selloff that has begun to roil the entire tech sector.
[5]AWS says you're on your own if media codec patent owners come knocking
[6]Amazon's European datacenter buildout blows a breaker as grid connection wait list hits 7 years
[7]Amazon CEO Andy Jassy goes wobbly on AI bubble possibility
[8]AWS raises GPU prices 15% on a Saturday, hopes you weren't paying attention
Even after Jassy delivered his impassioned defense of the AWS datacenter spending, and his confidence in the value that would return, Doug Anmuth, analyst with JP Morganm, wanted to know if he had set any "financial guardrails" on spending. If Amazon has any such protections Jassy didn’t mention them, but continued to talk up spending "aggressively."
"I think this is an extraordinarily unusual opportunity to forever change the size of AWS and Amazon as a whole," Jassy said. “And so we see this as an unusual opportunity, and we are going to invest aggressively here to be the leaders."
[9]
Jassy said one big advantage AWS has over competitors is its homegrown chips. The Trainium accelerators and Graviton CPUs are already delivering annualized revenue run-rate of $10 billion, and that’s growing at triple-digit percentages year to year.
Jassy said the company’s Trainium2 chips are used to power Project Rainier, which has linked more than 500,000 of them into what he called the world’s largest operational AI compute cluster. He said Anthropic is using that to train its AI models.
Trainium3 chips are already in the market, with the entire supply expected to be committed to workloads by mid-2026. Trainium4 will arrive in 2027 and bring six times the compute performance and four times the memory bandwidth of the Trainium3.
"Trainium is a multibillion dollar annualized run rate business at this point, and it's fully subscribed," he explained. "Customers are really thirsty for better price performance and Trainium has 30 to 40 percent better price performance than comparable GPUs, so it’s very compelling to customers." He added that the company is already having discussions about Trainium5. ®
Get our [10]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aYV1dPSaJC9w3xhO8DHeTQAAAc8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://www.theregister.com/2026/02/04/aws_codec_patent_holders/
[6] https://www.theregister.com/2026/02/03/amazon_power_europe/
[7] https://www.theregister.com/2026/01/20/amazon_ceo_andy_jassy_ai_bubble/
[8] https://www.theregister.com/2026/01/05/aws_price_increase/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aYV1dPSaJC9w3xhO8DHeTQAAAc8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://whitepapers.theregister.com/
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Wall Street, at least, was not happy...