Amazon is bleeding market value at a historic pace, shedding $450 billion as investors balk at the company's staggering $200 billion AI spending commitment for 2026. The sell-off marks one of the steepest declines for any tech giant in recent memory, raising urgent questions about whether AI infrastructure investments will pay off fast enough to justify the massive capital deployment.
Amazon is in freefall. The e-commerce and cloud computing giant has watched $450 billion in market capitalization evaporate during what's shaping up to be one of the most brutal losing streaks in its history, according to CNBC reporting. The trigger? A jaw-dropping $200 billion AI spending plan that has investors questioning whether the company's betting the farm on technology that won't deliver returns fast enough.
The scale of the spending commitment is unprecedented, even by Big Tech standards. Amazon revealed during its latest earnings call that it expects to pour $200 billion into AI initiatives throughout 2026, a figure that dwarfs previous infrastructure investments and signals the company is going all-in on artificial intelligence. But Wall Street isn't applauding the ambition. Instead, traders are hammering the stock as concerns mount about capital efficiency and the timeline to profitability.
This isn't just about Amazon. The company's struggles reflect a broader reckoning happening across the tech sector as investors grow increasingly skeptical of massive AI spending without concrete revenue projections. Microsoft, Google, and Meta have all committed tens of billions to AI infrastructure, but Amazon's $200 billion figure stands out as particularly aggressive, especially for a company that's traditionally been disciplined about capital allocation.
The spending spree centers on Amazon Web Services, the company's cash cow cloud division that's racing to build out AI infrastructure to compete with Microsoft's OpenAI partnership and Google's homegrown AI capabilities. AWS customers are demanding access to cutting-edge AI models and the compute power to run them, forcing Amazon to make massive investments in specialized chips, data centers, and energy infrastructure. But there's a timing problem: these investments hit the balance sheet immediately while revenue from AI services will take quarters or even years to materialize.
