Amazon shares fall nearly 8% after announcing record $200 billion investment in AI

Shares of Amazon registered a fall of nearly 8% this Friday after the company announced plans to allocate $200 billion in 2026 to data centers, satellites and other key infrastructure linked to artificial intelligence, a figure that exceeded Wall Street forecasts by $50 billion.

According to The New York Times, the tech giant unveiled this ambitious investment plan during the presentation of its fourth-quarter results, in a context marked by growing competition among large companies in the sector to lead the development of AI. The amount announced represents the most recent increase in capital spending earmarked for this technology by major technology firms.

Amazon's announcement follows similar commitments made by other industry giants. Google reported that it plans to invest up to $185 billion this year, while Meta signaled last week that its capital spending - largely geared toward AI infrastructure - could reach $135 billion. Combined, Amazon, Microsoft, Meta and Google already exceed half a trillion dollars in planned annual investments.

Magnitude of investments and general concern

The magnitude of these investments has generated concern among investors, especially because of the time required to realize returns. Following the announcement, Amazon shares fell more than 10% in post-market close trading, in a reaction similar to that seen recently with other technology companies. Microsoft, for example, suffered a near 10 percent drop last week, despite beating sales and profit expectations, due to higher-than-anticipated capital spending and slightly lower growth in its cloud computing business. In Friday's session, Amazon shares were trading down about 8 percent.

During a call with analysts on Thursday, Amazon CEO Andy Jassy defended the investment strategy. "I think this is an extraordinarily unusual opportunity to permanently resize Amazon," the newspaper reviewed.

Jassy argued that, from the perspective of tech executives, investing too little in artificial intelligence represents a greater risk than overspending.

Amazon and its competitors argue that they do not currently have enough operational capacity in their data centers to meet strong customer demand for AI services. In addition, they claim that adoption of this technology drives greater use of traditional cloud computing services, generating additional revenue across the enterprise.