Amazon, Google, Microsoft on track to spend nearly $600B on AI infrastructure in 2026

Amazon, Google, and Microsoft are on track to spend a combined nearly $600 billion on capital expenditures in 2026, according to their latest quarterly earnings reports. The three hyperscalers are racing to build AI infrastructure to meet demand that, they say, continues to outpace their ability to add capacity.

Amazon Web Services alone generated $42.2 billion in revenue in the second quarter of 2026, a 36.7 percent increase year over year. CEO Andy Jassy said AWS is now a $169 billion annualized run rate business, which would rank it 24th on the Fortune 500 if it were a standalone company. Amazon raised its 2026 cash capex forecast to $220 billion, up from $200 billion, driven partly by higher memory costs.

Capacity constraints persist despite record spending

All three companies reported that demand is still outstripping supply. Jassy said Amazon will not have enough capacity to meet all demand in 2026 and expects the same dynamic in 2027. Google CFO Anat Ashkenazi said the company is working in a supply-constrained environment and that demand has outpaced capacity growth over the past three years. Microsoft reported Azure and other cloud services revenue growth of 43 percent, with commercial cloud reaching $59.3 billion for the quarter.

• Amazon AWS: $42.2B quarterly revenue, $169B annualized run rate, $220B capex guidance
• Google Cloud: $24.8B quarterly revenue, up 82 percent, capex guidance raised to $195-$205B
• Microsoft commercial cloud: $59.3B quarterly revenue, up 27 percent, ~$175B capex expected for 2026
• Combined capex: approximately $600B across the three providers

Infrastructure buildout faces physical and regulatory hurdles

The surge in spending is pushing cloud providers to explore new approaches to data center construction and site selection. Startup Runware this week announced a modular data center called the Sonic Inference Pod, designed to be portable and rapidly deployable. Meanwhile, EdgeCore filed plans for a second phase of its Louisa County campus in Virginia, adding three buildings in the Shannon Hill Regional Business Park. Google is reportedly a potential customer for a 900-acre MidAmerican Energy data center campus in Salix County, Iowa, proposed in June.

Regulatory pressures are also mounting. The Greater London Authority has issued new guidance that prioritizes data centers that are clean, green, and efficient, and it may allow development on grey belt land. This could affect future buildout plans in one of Europe's largest data center markets.

Looking ahead, Google's Ashkenazi indicated that capex is expected to rise significantly again in 2027, though the company did not provide a specific figure. The cloud giants are betting that the AI boom will justify the massive outlays, even as some analysts warn of a potential bubble. For now, the spending shows no signs of slowing.