π Clouded Judgement: Amazon Raises AWS CapEx Guidance to $220B β Jassy Breaks Down the ROI Math
Amazon lifted its 2026 capex guidance to $220B, and CEO Andy Jassy used the Q2 earnings call to lay out why he believes ROI on AI infrastructure spend is strong.
β’ Data centers carry a ~2-year build lag but a 30+ year useful life; equipment (chips, servers) pays back in ~3 years with a 5-6 year life β so each data center cycles through 5-6 profitable equipment "generations."
β’ Jassy says AI margins are tracking (or beating) cloud's margins at the same buildout stage, with demand outstripping supply through 2028 reservations.
β’ The kicker: Amazon now frames AWS as a $1 trillion revenue business over time, up from a prior "few hundred billion" estimate.
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