Amazon Doubles Debt to $129B for $220B AI Buildout
Amazon's debt nears $129 billion as 2026 capex guidance climbs to $220 billion. AWS grew 37% to $42.2 billion — but CEO Jassy won't detail the funding.
The number that frames it
Amazon's long-term debt has climbed to $128.9 billion, close to double the roughly $65 billion it carried six months ago. A $25 billion bond sale, placed with ease, helped foot the bill. The trigger sits in the capital plan. Amazon lifted its 2026 capex guidance to $220 billion, up from an already steep $200 billion, blaming the extra $20 billion on surging memory-chip prices — a cost pressure now hitting every hyperscaler.
Jassy's defence
CEO Andy Jassy frames the outlay as mandatory, not discretionary. Even at $220 billion, he says, capacity won't meet demand this year, and the same will hold in 2027. Pressed on how Amazon funds the bill, he offered little: "Nothing to share." That is the real friction for the tape. A company doubling its debt while leaving the funding vague is asking the market to trust a bet whose return is still unproven. Bondholders carry the risk today; tomorrow's AI demand is supposed to deliver the payoff.
AWS is delivering — for now
The operating side is strong. AWS grew revenue 37% to $42.2 billion in Q2, its fastest pace in 18 quarters, and Jassy floated the idea of a "trillion-dollar" business. As long as the cloud unit holds that momentum, it carries the capex mountain with room to spare. If growth slips even a few points, the debt load stands exposed and the refinancing question gets loud.
The trade
This one runs through margins. Every incremental capex dollar hits free cash flow and weighs on the multiple before it books a cent of revenue. The market has been paying up for capital-light AI: Apple recently overtook Nvidia precisely because it skips the multibillion-dollar buildout. Amazon sits at the other pole — maximum capital intensity, maximum dependence on AI demand that keeps climbing. For Nvidia the read is cleanly bullish: much of that $220 billion flows into chips and memory, and Microsoft and Alphabet are ratcheting their budgets higher in parallel. The open question for AMZN holders: when do investors start demanding returns instead of growth promises?