Amazon's AI spending outpaces cash flow as racks reportedly wait for power
Business Insider reports that AWS is taking early delivery of about $5 billion of Nvidia GB300 racks while some sites lack power. Amazon's own filing shows the cash drain and the unpaid equipment that fits it.
Amazon Web Services was due to take delivery of roughly $5 billion of Nvidia GB300 racks at US facilities before final deployment. That is the account in August internal emails reviewed by Business Insider. The emails describe a new Early Rack Receipt process. One of them projects about $3 billion more each month for the foreseeable future.
Amazon says it routinely stages finished hardware near deployment sites and calls that best business practice. Its filings do not discuss power shortages, but the cash figures support the same reading: powered buildings are replacing chips as the limit on Amazon's AI build.
Spending exceeds operating cash
Amazon's second quarter results show the squeeze. Operating cash flow was $45.4 billion, while cash spending on property and equipment, net of incentives, was $53.1 billion. Free cash flow was an outflow of $7.7 billion.
A year earlier the same sum left $1.1 billion in hand. Amazon's own figure for the trailing twelve months is an outflow of $7.6 billion, against an inflow of $18.2 billion a year before.
In the second quarter of 2026 Amazon's operating cash flow was 45.4 billion dollars against 53.1 billion of cash capital spending, leaving free cash flow of minus 7.7 billion, compared with plus 1.1 billion a year earlier.
View data
| Measure | Q2 2025 | Q2 2026 |
|---|---|---|
| Operating cash flow | 32.5 | 45.4 |
| Cash capital spending, net of incentives | 31.4 | 53.1 |
| Free cash flow (calculated) | 1.1 | -7.7 |
Equipment is also arriving faster than it is paid for. The supplemental cash flow table in the release tracks property and equipment acquired but not yet paid. It rose by $10.7 billion in the second quarter, against a fall of $1.6 billion a year earlier. Over six months the rise is $20.6 billion, against $1.5 billion in 2025.
That line is where an early receipt policy shows up in the accounts. AWS used to take ownership of a finished rack only on delivery to a data center, the report says. Under the new approach it can pay for and record certain racks earlier in the supply chain.
The balance sheet shows the scale of what is being booked. Net property and equipment rose from $357.0 billion at the end of 2025 to $446.0 billion at 30 June, according to Amazon's Form 10Q. That is an increase of about $89 billion in six months.
Equipment recorded as an asset earns nothing until it enters service. Depreciation also starts when it is switched on, so the cost of holding it appears in cash flow first.
The projected flow is large against that spending. At $3 billion a month, GB300 racks would come to $9 billion a quarter, about 17% of the second quarter's cash capex. One rack generation could take a sixth of the build.
Spending is growing far faster than the cash that funds it. Cash capex rose 69% from $31.4 billion in the second quarter of 2025, while operating cash flow rose 40% from $32.5 billion. The gap between them flipped from a small surplus to a deficit within a year.
For the first six months, cash capex was $96.3 billion, against $55.6 billion a year earlier. Free cash flow was an outflow of about $24.9 billion, and Amazon says it expects capex to increase in 2026.
Profit does not cover it. AWS earned $16.6 billion of operating income in the quarter, which funds about 31% of group cash capex. The rest comes from the wider business and from the balance sheet.
Amazon guides third quarter operating income to between $22.5 billion and $26.5 billion, against $17.4 billion a year earlier. Profit rises as racks are switched on, while the bills arrive on delivery. Any lag in powered buildings widens the distance between the two.
Buildings need power before racks can earn revenue
Power takes longer to arrange. People familiar with the effort told Business Insider that some AWS sites had room for more racks but lacked the power to turn them on. Finished equipment waited in intermediary warehouses until the facilities were ready.
Amazon disputes the broader claim that the company lacked a path for getting racks into data centers. It does not dispute the staging.
The 10Q shows power being bought on a different clock from chips. Amazon says it enters energy contracts to secure electricity supply for its existing and future operations, some of which extend 20 years. Power is arranged for decades, while racks can be ordered and delivered within months.
Demand is real, and it sharpens the problem. AWS sales grew 37% to $42.2 billion. Amazon reports that Anthropic expanded its commitment to AWS by more than $100 billion over ten years, and OpenAI by $100 billion over eight.
Revenue starts when a rack is powered, and spending starts when it is received. Staging near sites may secure allocation from Nvidia, but allocation is paid for on arrival. The 10Q says open purchase orders are generally cancellable in full or in part, which leaves the exposure in equipment that has already arrived.
Contract timing determines who carries the cost
Every GB300 purchase contract faces this trade-off. Taking ownership at the factory or a warehouse secures allocation and starts the payment clock while the asset sits unpowered on the balance sheet. Taking ownership when power is connected means delivery when the building is live, with the risk of losing queue position. Tying ownership transfer to the utility connection date instead of the shipping date moves the holding cost back to the buyer who controls the building.
Amazon's third quarter 10Q is due by 9 November under SEC rules. It should show unpaid equipment up again, with cash capex above the second quarter's $53.1 billion and operating cash flow still short of it. If the unpaid equipment line turns negative, racks are being powered as fast as they arrive and the power queue is not the constraint.