Amazon Increases Investment to Meet AI Service Demand

Amazon.com Inc. spent more than $77 billion on property and equipment in the third quarter, far exceeding analyst expectations, as the company continues building data centers to meet demand for artificial intelligence services. The high capital expenditure resulted in negative free cash flow of $42.4 billion for the quarter. The company also reported revenue up 12% year over year to $201.9 billion. Revenue growth at its cloud unit AWS accelerated for the sixth consecutive quarter, but Amazon's core online retail business showed signs of sluggish growth. AWS growth has picked up this year, benefiting from orders from AI companies such as OpenAI and Anthropic, both of which rely in part on Amazon servers to run their models. Amazon continues to expand its data center clusters to boost computing capacity for enterprise customers. In July, Amazon said capital expenditure is expected to rise to $220 billion in 2026, with supply constrained by a shortage of memory chips. The stock closed at $243.79 in New York, down more than 6% after hours; as of Thursday's close, the shares were up 5.6% year to date.