Amazon's Debt Rises Sharply Amid Record Capital Spending on Data Centers
Amazon’s long-term debt nearly doubled to $128.9 billion in six months, driven by a significant increase in capital spending as the company ramps up data center construction. CEO Andy Jassy defended this aggressive investment strategy during Amazon's Q2 earnings call, explaining that it takes two years before these centers generate revenue due to lead times and infrastructure requirements. The tech giant spent $53.1 billion on capital projects alone in the second quarter of 2026, with full-year spending now expected to reach around $220 billion—up from earlier projections. Jassy attributed this increase partly to rising memory prices. Despite record net sales and a large non-operating gain from its stake in AI firm Anthropic, Amazon’s free cash flow turned negative for the first time in six quarters. The company's debt load has grown as it finances these capital expenditures through borrowing, with interest expenses more than doubling year-over-year to $1.3 billion. Jassy remains confident that the long-term returns from its data center investments will justify the current financial strain.
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