Amazon's Major AI Investment Sparks Investor Concerns

Sat Feb 07 2026 01:02:14 GMT+0200 (Eastern European Standard Time)

Amazon has announced a significant $200 billion investment in artificial intelligence and infrastructure for this year—a move that has alarmed investors, leading to a decline in its stock prices.

In a bold move, Amazon is set to invest $200 billion in artificial intelligence and infrastructure in 2026, a sharp rise from $125 billion last year. However, this announcement did not sit well with the market, as shares dropped by over 11% post-announcement. This decision comes amid collective plans from major tech firms to invest $650 billion in AI, raising fears of a potential market bubble. Amazon's CEO Andy Jassy believes these investments will ultimately transform customer experiences, despite the current market jitters.

Amazon is the latest US tech giant to announce a huge increase in spending on artificial intelligence (AI) and infrastructure.

Reporting its annual results, Amazon said it will put $200 billion (£147.7 billion) this year into building out its business, with a significant portion allocated to AI.

This expenditure marks a substantial increase from last year's $125 billion. However, the announcement was not well-received by investors, as shares plummeted over 11% in after-hours trading.

In the past week, it was revealed that Amazon, Meta, Google, and Microsoft collectively plan to invest $650 billion in AI and related projects this year. With this announcement, Amazon positions itself as the most aggressive investor in AI among Big Tech companies.

The scale of AI investment announced by these firms is equivalent to more than double the economic output of Peru.

Amazon's investments will focus on AI, chips, robotics, and low earth orbit satellites, but CEO Andy Jassy emphasized that most of the spending will be concentrated on AI. It's an unusual opportunity, he stated, predicting that AI will reinvent customer experiences.

Despite the ambitious plans, there are growing concerns about an AI bubble. The Bank of England has cautioned that major tech firms may face a sharp correction in their valuations, reminiscent of the dot-com bubble.

In related predictions, Cisco's CEO noted that the transition to AI could lead to significant disruptions. Similarly, JPMorgan Chase's Jamie Dimon expressed that some investments in AI might result in losses.

Amid the investment surge, Amazon's Chief Financial Officer, Brian Olsavsky, mentioned that the company would be looking for cost reductions elsewhere, having recently laid off thousands of employees.

Other companies in the race for AI dominance are also making hefty investments. Meta plans to spend up to $135 billion this year on AI initiatives, while Google is set to allocate over $185 billion, with visions of expanding its technical infrastructure.

As investors seek clarity on the profitability of AI projects, shares of Amazon, Meta, Microsoft, and Google have experienced declines, despite rising revenues and profits. The S&P 500 index has also dropped over 1% amid concerns about high valuations in the tech sector.

Mary Therese Barton, Chief Investment Officer at Pictet Asset Management, noted that the drop in share prices indicates a wake-up call regarding the feasibility of AI investments, as the market seeks to discern the potential winners and losers in this burgeoning sector.