So Amazon rolls up to the poker table

and sits down with their amount and chips.

Their big monopoly amount of chips.

They scrabble with both hands and they shove it to the center of the table.

They say I'm all in.

That's exactly what they've done on AI today, where they just announced

that they're going to be spending $200 billion on AI, which was a real shocker

to Wall Street, because they thought they were only going to spend 146 billion.

In the stock, who dropped 10% after hours.

But here's a stat that should really scare you.

Their free cash flow decreased.

By 78% in just one year.

From 38 billion to just 11 billion.

They are cash poor right now for a company.

They're spending it faster than they can make it.

Let's hop into what happened.

On paper, this was a fantastic quarter for Amazon.

And that is why this is so surprising.

We got Q4 revenue 213 billion, up 14% year over year.

Beat the estimates.

AWS 35.6 billion, which is up 24%.

The fastest growth in 13 quarters per Andy Jassy.

And the full year report for 2025, $716.9

billion in revenue, 77.7 billion net income.

That is huge.

slight miss on EPS 195 versus 197 expected.

So none of this caused the sell off.

What caused the sell off was just one sentence from Andy Jassy.

Andy Jassy gets on the earnings call

and he drops this bomb, which heats the stock down.

He says, quote, we expect to invest about $200

billion in capital expenditures across Amazon in 2026.

And the stock cratered.

By their own figures, they expected 131 billion.

Wall Street

consensus thought it might be 146 billion, a little higher than they're saying.

Nothing too big, though.

And then Amazon overshot on the real number by 54 billion.

Oops.

Q4 alone was about 38 billion in CapEx.

And just to illustrate how effed up and crazy

this is, that's $1 billion every three days.

So what are they blowing it on?

AI chips, robotics and low Earth orbit satellites.

That's four different moonshots funded by one CapEx line.

Here's where it gets real.

After up, though, since October they have laid off about 30,000 employees,

mostly Americans,

and they've been scaling up their operation in India for cheaper labor.

I have a great video on this from two weeks ago.

Go check that out if you missed it.

And the picture is becoming a lot clearer here.

And you already knew this narrative because you're here on the channel.

They are not laying off because of AI

is not replacing these jobs with sufficient level of quality.

They while they are kind of laying them off

because of AI, but not in that way.

They're laying them off because they need money to spend on AI data centers,

and then they're rehiring

these employees in India so they can get them for much cheaper.

It is a keep alive game.

This is not a long term strategy for them.

This is a keep alive game to cut spending on employees

while moving them to India, to get some less expense

on employees over there, and then taking all that extra money.

We're saying we're putting it all on red.

We're going to invest all of this in AI infrastructure.

That is the play.

That is the play.

So yes, I guess in a sense AI is taking these jobs,

but it's not actually replacing them by automating them.

They just need the money to buy more compute for AI.

As you know, Amazon is not doing this alone.

Big tech is collectively planning

to spend over $600 billion on AI infrastructure this year.

And nobody can tell you

who's buying the output or how this is even monetizable.

Alphabet, which is Google blowing 175 to 185 billion in CapEx for 2026.

Meta in the 115 135 billion range.

Microsoft is already at a $90 billion annual run rate.

If you want to see my video on how that got all left up,

that was posted earlier this week. Go check that out as well.

So total Hyperscaler CapEx projected to be 600 billion plus for 2026.

That number is from credit sites, which is up 36% from 2025.

Just last year.

The Goldman Sachs consensus is 527 billion.

And that's rising every quarter.

And you know I like to put these numbers in scale.

It's hard to visualize these massive billion

dollar amounts just out of nowhere.

And so I have a couple of cool comparisons here for you.

the percentage spending of this country's GDP on

what we're spending on AI infrastructure now exceeds the Manhattan Project.

The Apollo program, and the broadband buildout combined.

And in a rare bit of really good reporting from Yahoo Finance,

they ask the question that we should all be asking.

They say, quote, is this spending being pulled by customer

demand or pushed by competitive fear?

Certainly the latter. In this case.

Here's the bottom line.

Amazon made $78 billion in profit last year.

They are now about to spend $200 billion on AI infrastructure

that will run models that nobody knows how to make money off of or monetize.

And they are hoping this situation solves itself before they run out of business.

Their free cash flow is collapsing while their CapEx accelerates that.

That is the math.

That's not an opinion. That is a fact on paper.

They are firing humans so that they can rehire them more cheaply

in India and other parts of the world to save some money on employee expense.

And they're taking that money and they're using it to build data centers.

And why did the stock crater 10% then, compared to similar news that came out

from similar tech giants over the past few weeks, months and the end of 2025?

Well, it's because Wall Street is finally saying, where is my money?

I have invested in this.

It looks now like it's being driven by fear and competition

more than the actual business sense that something will pay off here,

and I want my money back before this goes up in flames.

And like it or not, if you are holding a considerable

amount of Amazon, you are now at the poker table.

You are now all in whether you like it or not.

You were. You were now $200 billion into this.

Waiting to see is somebody going to figure out this problem or are we going

to get a government bailout before shit hits the fan?

I don't know. Your guess is as good as mine.

Let me know what you think in the comments.

If you want to follow the money on big tech AI spending chips data center builds.

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