Amazon capital spending tops $77 billion as AI data center buildout accelerates
Rising demand for artificial intelligence infrastructure is pushing Amazon.com Inc. to spend at a much faster pace as it expands data center capacity in the third quarter. The outlay comes in well above analyst estimates and contributes to a free cash outflow even as the company posts double-digit revenue growth.
Highlights
- Amazon spends over $77 billion on property and equipment in Q3, driving a free cash outflow of $42.4 billion.
- Amazon's Q3 revenue rises 12% to $201.9 billion amid a major buildout of data centers for AI infrastructure.
- Amazon Web Services sales accelerate for the sixth straight quarter, while core online retail shows signs of sluggish growth.
Quarterly spending and financial performance
As reported by Bloomberg, Amazon.com Inc. spends more than $77 billion on property and equipment in the third quarter as it pursues a broader expansion of data centers to support demand for artificial intelligence services.The elevated investment leads to a free cash outflow of $42.4 billion. Amazon also reports that revenue gains 12% to $201.9 billion during the quarter.
Cloud momentum and retail growth concerns
Sales at Amazon Web Services accelerate for the sixth straight quarter, indicating continued strength in the company’s cloud business as customers increase spending tied to AI workloads.At the same time, the results show signs of sluggish growth in Amazon’s core online business, suggesting that the group’s largest investment push is being carried increasingly by demand for cloud and AI infrastructure rather than by faster expansion in retail operations.
In our earlier article on the U.S. AI data center buildout, we highlighted that many planned projects were being delayed or canceled as costs rose and funding became harder to secure. We also noted that investor confidence can weaken when construction overruns and power-grid limitations slow the pace at which new computing capacity can actually come online.
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