Amazon and Alphabet Project $420 Billion AI Infrastructure Spend

Amazon.com and Alphabet Inc. are committing combined capital expenditures of approximately $420 billion in 2026 to expand data center and computing capacity. Amazon projects spending about $220 billion, while Alphabet provides a guidance range of $195 billion to $205 billion. Both companies report massive backlogs—$496 billion for Amazon and $514 billion for Alphabet—as demand for AI infrastructure continues to outstrip available capacity.

Amazon Web Services reported 37% year-over-year revenue growth in the second quarter. CEO Andy Jassy stated the company lacks sufficient capacity to meet demand for 2026 and expects this trend to persist into 2027. Amazon projects that AWS could eventually become a $1 trillion business, noting that it achieves breakeven on server and networking equipment in less than three years.

Alphabet's Google Cloud revenue grew 82% year-over-year in the second quarter, totaling $24.8 billion. To support this growth, Alphabet plans to invest at least $15.1 billion in Finland over the next two years to build three new data centers and secure a 22-year nuclear power purchase agreement. Alphabet is increasingly leveraging its custom Tensor Processing Units (TPUs) as an alternative to Nvidia Inc. hardware, which reduces the payback period on server investments to less than two years.