Amazon Bets Hundreds of Billions on AI While Closing Stores to Defend Its Tech Giant Status

(International) Amazon stunned global financial markets after announcing it would raise its investment budget by more than 50% this year to accelerate the build-out of artificial intelligence infrastructure. Following the announcement, Amazon shares dropped 11.5%, as reports surfaced that the company plans to invest up to USD 200 billion in AI by 2026. D.A. Davidson analyst Gil Luria said Amazon “has to invest at this level just to stay competitive.” The news was released on February 06, 2026.

Despite investor concerns over massive spending, CEO Andy Jassy defended the strategy. He explained that while competitors such as Google and Microsoft may show higher growth rates, Amazon’s annual revenue of USD 142 billion makes maintaining 24% growth particularly impressive. “There’s a big difference between growing on a massive revenue base versus achieving high growth on a much smaller one,” he said.

Beyond technology, Amazon is also reshaping its retail operations. The company plans to close physical stores such as Amazon Fresh and Go, while expanding Whole Foods megastores to compete directly with Walmart. Jassy emphasized that AI will significantly improve efficiency: “We’re working relentlessly… to turn what once seemed impossible into reality.”

Observers note that Amazon is willing to absorb short-term pain for long-term gains. The company has cut tens of thousands of corporate jobs and shut down unprofitable businesses to redirect capital toward AI, now seen as a key weapon in the digital era. Future success will depend on how quickly these multibillion-dollar investments translate into profits, meeting Wall Street’s expectations.