SAN FRANCISCO, July 22, 2026, 09:09 PDT — U.S. market open
- Amazon has reduced headcount in its AGI unit, though the company did not specify how many positions were affected.
- Cash capital expenditure in the first quarter jumped 78% to $43.2 billion. AWS revenue climbed 28%.
- Amazon is scheduled to release its second-quarter earnings after the market closes on July 30.
Amazon eliminated positions within its artificial general intelligence team on Wednesday. The firm expects to invest roughly $200 billion in capital expenditures this year. The move highlights a preference for deploying funds to drive returns over reducing workforce costs, benefiting shareholders.
Amazon has not revealed how many positions were cut. As a result, the impact on earnings cannot be calculated. For investors, the decision highlights a more selective approach to internal AI initiatives.
Artificial general intelligence (AGI) refers to a theoretical system that exceeds human intelligence and functions independently. Amazon stated that large-model development continues to be one of its top priorities. The company said the job reductions were meant to streamline efforts toward a more focused customer approach.
Rohit Prasad, who led Amazon’s AGI efforts, exited the company at the end of the year. David Luan, head of AGI Lab, left in February. Amazon brought its AGI operations under Peter DeSantis in December.
DeSantis is responsible for custom silicon and quantum computing. This organizational setup more tightly integrates model research with Amazon’s chip technology and cloud platform.
The move comes after January’s announcement of 16,000 corporate layoffs. That brought cumulative cuts since October to about 30,000, or almost 10% of Amazon’s white-collar workforce. As of March 31, the company employed 1.575 million people.
Amazon’s cash outlay is more concretely tracked. Capital expenditures using cash in the first quarter rose by $18.9 billion from a year earlier, largely going toward technology infrastructure and expanded fulfillment facilities.
| Amazon metric | Earlier period | Latest period | Change |
|---|---|---|---|
| Q1 cash capital expenditure | $24.3 billion | $43.2 billion | up 78% |
| Q1 AWS sales | $29.3 billion | $37.6 billion | rose 28% |
| Q1 AWS operating income | $11.5 billion | $14.2 billion | increased 23% |
| Trailing 12-month free cash flow | $25.9 billion | $1.2 billion | down 95% |
The quarterly results pertain to periods concluding on March 31, 2025, and March 31, 2026. Free cash flow reflects the respective trailing twelve-month periods. Variations are derived using Amazon’s disclosed figures.
Investors are focusing on two ratios. Cash capital expenditure for the quarter was 115% of AWS revenue. Capital expenditure growth outpaced AWS revenue growth by roughly 50 percentage points.
The comparison is indicative, as capex pertains to all of Amazon’s operations. However, a majority of technology-infrastructure spending drove AWS expansion.
Cash generation is under pressure. Trailing free cash flow declined to $1.2 billion from $25.9 billion. Amazon said the decrease was mostly due to increased spending on property, mainly related to AI.
Chief Executive Andy Jassy has justified the expenditures. In April, he noted AWS achieved its quickest growth in 15 quarters. He anticipates a “strong long-term return on invested capital” from the 2026 plan. Amazon
Amazon shares slipped by roughly 1.5% to $243.88 at midday. The Nasdaq dropped 0.25% during mixed trading earlier in the session. Investors had already been closely watching Big Tech’s spending on AI.
Amazon will release its second-quarter earnings following the market close on July 30. Investors are focused on AWS growth, capital expenditures, and updates concerning AGI-related products. Maintaining a reduced research pipeline is not significant as long as product launches remain consistent.
The primary risk is execution. Leadership changes and workforce reductions may delay progress on model development. Ongoing increases in capital expenditures might strain cash flow ahead of new capacity generating revenue.
