Amazon plans to keep spending heavily on projects to build logistics facilities and data centers this year, despite tariffs roiling the global economy.
“We have invested and will continue to invest aggressively to expand and leverage our customer base, brand and infrastructure,” CEO Andy Jassy said in his annual letter to shareholders released on Thursday.
Jassy's letter comes as Amazon is considering a $15 billion plan to add roughly 80 logistics facilities in U.S. cities and rural areas, Bloomberg reported.
Amazon is asking potential capital partners to submit proposals for the projects, expected to be mostly delivery hubs where vans and trucks are loaded for the final trip to shoppers' homes. However, the projects will also include multistory fulfillment centers filled with robots, according to Bloomberg.
Amazon said the projects being discussed are ideas up for consideration but haven't yet been finalized.
“Meetings like this with our capital partners are routine and part of the normal due diligence process as we consider potential future projects," Amazon spokesperson Steve Kelly said in an email.
Tariff pain
Amazon's commitment to increased technology and delivery spending comes as the company assesses the impact of President Donald Trump’s sweeping tariffs.
Amazon will do everything possible to keep prices low, but the e-commerce giant's vast network of sellers is likely to make consumers pay the added costs, Jassy told CNBC on Thursday.
Amazon is ramping up its number of delivery centers and other facilities and equipment across its vast fulfillment network this year as the online retailer pushes to boost e-commerce sales and cut costs and the time it takes to fill orders.
Tariffs are an obstacle to the firm's industrial development plans, as climbing construction costs make new projects harder to pencil. A 25% tariff on steel and aluminum — materials used in industrial properties — took effect March 12. Increased tariffs on lumber and concrete could also hurt industrial construction, as well as rising import costs for electrical components and other infrastructure materials from China. Port traffic is expected to slow along with imports, tightening demand.
Still, Amazon's expansion of its logistics footprint comes as welcome news for warehouse owners and developers, since U.S. industrial occupancy growth over the past year has lagged its pre-pandemic average by about 34%, said Jesse Gundersheim, CoStar's senior director of market analytics for Los Angeles.
Amazon continued to buy land for development across the country in the first quarter of 2025, and the company’s potential development of another 80 warehouses is significant, Gundersheim said.
The company already occupies over 1,200 logistics facilities in the country, and more than 83% of those are 100,000 square feet or larger, he added. In the first quarter of 2025 alone, U.S. developers completed 320 buildings of at least 100,000 square feet for all types of industrial tenants. This includes more than 30 warehouses 500,000 square feet or larger, Gundersheim added.
Data center spending
Jassy said in Thursday's shareholder letter that “substantial capital” is required to stay competitive in AI and cloud computing innovation.
“The faster demand grows, the more data centers, chips and hardware we need to procure, and AI chips are much more expensive than CPU chips,” Jassy said.
The CEO said during the company’s last earnings call in February that the “vast majority” of Amazon’s planned $100 billion in spending on capital expenditures this year will be to expand AI capabilities in its Amazon Web Services cloud service.
Amazon, Microsoft, OpenAI and other firms intend to keep spending on data centers, even as Trump's tariffs threaten to increase development costs that could potentially stymie the nation’s booming AI industry along with the industrial real estate sector.
Redmond-based Microsoft confirmed this week it is “slowing or pausing” some of its data center construction, including a $1 billion project in the early stages of development in Ohio’s Licking County. The company continues to monitor the pacing and costs of data center projects.
“By nature, any significant new endeavor at this size and scale requires agility and refinement as we learn and grow with our customers,” Noelle Walsh, the president of Microsoft's cloud computing operations, said in a post on LinkedIn this week. “What this means is that we are slowing or pausing some early-stage projects.”
While Microsoft “may strategically pace our plans,” the company is on track to spend a record $80 billion on data centers in the fiscal year ending in June, Walsh said.