Jassy Defends Amazon's $200B AI Spending Spree

Amazon CEO Andy Jassy used his annual shareholder letter to justify the company's massive capital investments, revealing AWS AI revenue has hit a $15 billion annual run rate and its internal chips business generates over $20 billion yearly. Free cash flow dropped from $38 billion to $11 billion last year due to a $50.7 billion surge in capital spending. Jassy argues the spending is demand-driven, not speculative, noting two customers tried to buy all available Graviton chip capacity for 2026. He also signaled Amazon may sell Trainium chips and robotics solutions externally, following its playbook of monetizing internal capabilities through outside services.