Amazon blew $1.8 million on a failed AI task — and didn't notice for 5 months

Amazon blew $1. 8 million on a failed AI task — and didn't notice for 5 months Joseph Zeballos-Roig Fri, July 31, 2026 at 4:30 PM GMT+2 4 min read AMZN Amazon is among those in the pack of Big Tech companies spending staggering sums on developing AI and deploying it to drive automation within the company. In some cases, the bills are larger than Amazon employees had anticipated.

The Financial Times (FT) reported on Thursday that Amazon employees identified multiple cases of "catastrophically expensive" overspending from its efforts to integrate AI into the workforce. Must Read Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake.   Here's what it is and 3 simple steps to fix it ASAP The tax breaks in Trump's 'big beautiful bill' expire after 2028 — and experts say most people won't act in time.

What to do before the window closes In one instance, employees were briefed on one episode in which Amazon spent $1. 8 million to align author details with listings on their shopping website. Anthropic's Claude Sonnet AI was used to execute the task but it flopped, the FT reported.

The $1. 8 million sum amounted to an 860% cost overrun and took the company five months to detect it, per the FT. An Amazon spokesperson told Moneywise that the company was "successfully" deploying AI across the company and pushed back against "cherry-picking small, isolated examples where teams are learning from one another and portraying them as business as usual.

" "As with any new technology, we're experimenting, learning, and improving how we use it, including how we drive cost efficiencies," the spokesperson said. "Amazon and AWS have built tools and guardrails to help teams monitor and manage AI spending, and we'll continue to improve them as we learn. " Amazon isn't going big on AI 'on a hunch' Senior Amazon engineers further briefed employees on two other instances of AI-related overspending, according to the FT.

The company was developing financial auditing tools and racked up $541,000 in unexpected spending to accomplish it. Then engineers leaned on AI to enhance delivery speeds and the task cost $134,000 more than expected, the FT reported. The briefing mentioned that the instances accounted for only a few teams at Amazon, which employs over 300,000 staff at the corporate level.

Amazon reported generating $717 billion in revenue in 2025. Amazon has said it will spend $200 billion on building out data centers, satellites and the equipment to back up its AI ambitions including expanded cloud computing. Story Continues "We're not investing approximately $200 billion in capex in 2026 on a hunch," Amazon CEO Andy Jassy wrote in an April letter to shareholders.

"AI is a once-in-a-lifetime opportunity where the current growth is unprecedented and the future growth even bigger. " The ramped-up AI spending, though, has been coupled with multiple rounds of layoffs. Since October, Amazon has shed 30,000 employees, per CNBC.

Last week, the company said it laid off staffers in its artificial general intelligence unit tasked with building out in-house AI models. Read More: Forget Florida — this is why these two unexpected states are the new retirement hot spots Amazon posts strong Q2 earnings Amazon released its second quarter results on Thursday, beating Wall Street's expectations on the top and bottom lines . Its AWS AI and chip unit both surpassed annual run rates of $25 billion.

As of Friday morning, Amazon was trading at $267 per share, jumping 13% as investors analyzed the news. The spike comes after Amazon shares dipped this month with investors unnerved about the enormous sums that hyperscalers are pouring into AI development and whether it will yield significant profits. What To Read Next Millionaires under 43 hold only 25% of their wealth in stocks.

Here's where their money is actually going Here are the 7 top habits of 'quietly wealthy' Americans. How many do you follow? Is your cash earning enough?

This fund has paid up to 8. 4% in historical returns — that's 22x the average savings account interest rate Here's the average income of Americans by age in 2026. Are you keeping up or falling behind?

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