“We’re not trying to be conservative.”

Amazon CEO Andy Jassy released his annual shareholder letter Thursday, reasserting Wall Street investors that the company’s massive investment in artificial intelligence is worth it.

“We do not intend to be conservative in this effort. We are investing to be a meaningful leader, which will result in much greater future business, operating income and (free cash flow) for us,” Jassy wrote.

The company said in February that it expects to spend about $200 billion in capital spending this year, the bulk of which will go toward AI infrastructure such as data centers, chips and networking equipment.

That’s more than any other technology company and up nearly 60% from last year.

Amazon stock has struggled so far this year as investors question the company’s aggressive AI spending plans and grow anxious about when their investments will pay off. The stock has fallen more than 4% since the beginning of the year.

Jassy said Amazon needs the capital to pursue “once-in-a-lifetime opportunities” and meet the “very high demand” for its AI computing.

He reiterated that claim on Thursday, also revealing for the first time that the cloud computing sector’s AI revenue has reached an annual operating rate of $15 billion.

“We are not investing approximately $200 billion in capital spending in 2026 based on a hunch,” Jassy wrote.

He specifically cited more than $100 billion in commitments from OpenAI, adding that Amazon has received commitments from customers for a “significant portion” of its capital investment and expects to monetize the majority of it next year and in 2028.

Amazon’s custom chip business, which includes Graviton processors, Trainium AI chips and the Nitro architecture, generates more than $20 billion in annual revenue and is “growing at triple-digit percentages” year over year, Jassy said.

Mr. Jassy, ​​who took over as CEO in 2021 following the retirement of founder Jeff Bezos, echoed the message his predecessor sent to Wall Street decades ago, when Amazon was experiencing years of unprofitability.

Bezos is testing investors’ patience by insisting that long-term growth is more important than short-term profits. Along the way, Amazon has invested heavily in cloud computing, warehouses, and devices.

Amazon ended up generating huge profits and growing to dominate new markets.

Jassy said Amazon sees an opportunity that could become a major “pillar” or growth engine for the company over the long term. He pointed to a “strong” chip business and highlighted growth in the grocery division, rapid delivery services and the nascent LEO satellite internet service.

“We are prepared to make significant capital investments and withstand near-term FCF headwinds to secure significant FCF surpluses over the medium to long term,” Jassy said.