Amazon CEO Andy Jassy on Why Amazon Is Investing $220 Billion in AI

Amazon CEO Andy Jassy tells a16z’s Ben Horowitz and Henry that Amazon is spending about $220 billion on CapEx because AWS and AI demand still exceed supply. He argues Amazon, AWS, Anthropic, OpenAI and Annapurna are positioning for a long infrastructure cycle, while CIOs should watch falling inference costs, smaller teams, and a looming security reset.

Key points

• Amazon says 2026 capacity is sold out, 2027 largely sold out, and some of 2028 is already booked.
• AWS grew 36.7% year over year on a $169 billion annualized run rate; Jassy says it could become a $1 trillion business.
• AI demand is barbelled: labs consume huge compute, while enterprises mostly use AI for cost avoidance and productivity.
• Jassy says inference remains about an order of magnitude too expensive for pervasive enterprise use.
• Amazon’s Tranium chips are aimed at improving AI price-performance by roughly 30% to 40%.
• He expects smaller, cross-functional teams, agentic codebases, and security response times measured in minutes.