Amazon says its cloud is largely sold out through 2027 while $3 billion a month of Nvidia racks wait for power
Andy Jassy says Amazon's cloud is booked into 2028 and the company could spend well past its $220 billion plan. The "dark GPU" receipts show the other side of the ledger: racks arriving monthly for sites with no electricity, and free cash flow already negative. Thursday's print is the first that can test the two against each other.
Richard Tang · 3 min read
The claim is about contracts, and the constraint is electricity
Amazon Web Services−0.72% — Amazon Web Services, down 0.72 percent today, the company's cloud division, is sold out. On a October 23 podcast from the venture firm Andreessen Horowitz, chief executive Andy Jassy said 2026 capacity is already spoken for, 2027 is "largely sold out," "a good chunk of 2028" is sold out, and Amazon "could invest a lot more" than its roughly $220 billion capital plan "and it wouldn't be a bad use of capital" 1.
Taken at face value, that settles the demand side of the buildout. But sold out is a statement about contracts, and switched on is a statement about the grid. The grid is where the same company is stuck: Amazon is taking delivery of Nvidia−0.54% — Nvidia, down 0.54 percent today server racks faster than its data centers can power them, the pile-up the industry calls dark GPUs 23.
Amazon broke its own buying rule
The discipline that broke was Amazon's own. On the July 30 call, Jassy described it: servers are bought "a few months before putting them into service, so we have strong visibility into customer demand before we trigger the spend" 4.
August internal emails reported by Business Insider describe the inversion: an Early Rack Receipt process bringing roughly $3 billion of Nvidia GB300 server racks a month, paid for and recorded before deployment, because some United States sites have room for the hardware but no electricity to run it 2. One team saw no "clear forecasted path" to installing what kept arriving 2.
We reported those receipts on October 19 2. What is new is the chief executive selling scarcity on top of them. Amazon calls the warehouse staging "best business practice" and disputes that it lacks an install plan 2.
The idle months land on Amazon's balance sheet
Jassy's own math prices the wait: average break-even on servers and networking gear runs a little under three years 4, and a rack waiting for power starts that clock late. Trailing free cash flow turned negative in the second quarter, the first time since 2023, and Amazon expects it to stay negative for a while 3. The cash leaves before the hardware runs 2, so the carrying cost sits with Amazon rather than with Nvidia, which gets paid on delivery either way.
Amazon's quarterly capex has almost quintupled in three years
Data
| Capital spending | |
|---|---|
| Q3 '23 | $11.3B |
| Q4 '23 | $13.35B |
| Q1 '24 | $13.94B |
| Q2 '24 | $16.39B |
| Q3 '24 | $21.28B |
| Q4 '24 | $26.05B |
| Q1 '25 | $24.26B |
| Q2 '25 | $31.37B |
| Q3 '25 | $34.23B |
| Q4 '25 | $38.47B |
| Q1 '26 | $43.23B |
| Q2 '26 | $53.08B |
October 29 has to show racks switched on
Thursday's third-quarter print is the first public test of the sold-out claim 1. Real scarcity shows up as AWS revenue accelerating, alongside an update to Jassy's July target of doubling 2025 power capacity by the end of 2027 4. Cardboard scarcity shows up as revenue that lags the racks.
The buildout remains the right bet, and the evidence points to its constraint having moved from silicon to substations, which is why the grid side now earns the marginal dollar (our October 22 piece on AEP's sold load). The figure that arbitrates the two camps on Thursday is megawatts energized, because power is the only input that turns a booked contract into billed usage.
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