- Amazon committed about $200 billion in 2026 capital expenditures for AI infrastructure, custom chips, robotics and satellites, funded by three self-growing profit drivers: AWS, advertising and retail.
- AWS Q2 revenue reached $42.23 billion, up 37% at its fastest growth in 18 quarters, at a 39.4% operating margin, with the contracted backlog at $496 billion and most 2027 capacity already reserved.
- The $496 billion AWS backlog rose $132 billion quarter over quarter, and Anthropic's $100 billion commitment plus OpenAI's expanded $100 billion pact plausibly account for over $200 billion of it, concentrating risk in two AI labs whose spending outpaces their revenue.
- Amazon's custom chip business passed a $25 billion annualized run rate with triple-digit growth, and the Financial Times reported Amazon is shifting about $8 billion of Nvidia hardware off its books in favor of its own ASICs.
- The spending is straining the balance sheet: trailing free cash flow turned negative at -$7.6 billion, capex hit $54.21 billion in one quarter, and total debt rose to $119.1 billion, with Q2 GAAP EPS of $5.75 flattered by a $53.4 billion Anthropic gain.
Quotes
“very possibly be a trillion dollar annual revenue business for us in time.”
“Anthropic's $100 billion AWS commitment and OpenAI's expanded $100 billion pact plausibly account for over $200 billion of the backlog”
“AWS hit $42B in Q2 revenue, up 37% at its fastest pace in 18 quarters”