AWS Spending Billions on Public Cloud and AI Efforts

Amazon has announced several multi-billion dollar cloud/artificial intelligence (AI)-focused public sector initiatives.

The announcements, made Tuesday (June 30) at the 2026 Amazon Web Services (AWS) Summit in Washington, D.C, include specialized infrastructure for defense contractors, migration incentives for intelligence agencies, and a global engineering program for AI deployment.

Among the initiatives is a $1 billion cloud incentive program for the U.S. intelligence community. While AWS is the intelligence services longest-running cloud partner, many workloads have yet to migrate, leading to the launch of this program to “eliminate the migration costs that have kept some locked in on-premises systems.”

In the defense sector, AWS has introduced its Secret Cloud for Industry (ASCI), designed to let defense contractors run contractor-owned classified workloads on the same AWS infrastructure trusted by the Pentagon, “in their own physically and logically isolated environment purpose-built to meet the most demanding security and compliance requirements.”

AWS will also invest $1 billion in Forward Deployed Engineering (FDE), a new global organization that will put thousands of engineers on-site with customers to co-develop AI solutions. This program is aimed at accelerating the development of AI applications from months into days.

“At the center is the AI-Driven Development Lifecycle, a new approach to software development that combines AI-powered execution with human oversight and dynamic team collaboration that builds intelligence for a customer’s next project,” the company said.

In other Amazon news, PYMNTS wrote recently about how the company and rival Walmart had moved past the battle for consumer spending in search of something “even more consequential:” making themselves into the operating systems between shoppers, brands, advertisers and commerce infrastructure.

For Amazon, the report said, that means things like continuing to promote Prime Day as a membership and ecosystem engine rather than merely a shopping event.

For Walmart, it means the expansion of the company’s retail media ambitions via a new partnership with Google and YouTube, offering advertisers more access to Walmart shopper data and closed-loop measurement capabilities.

“Individually, these stories appear disconnected,” the report added. “Collectively, they point toward a single conclusion: the future of retail may depend less on who sells products and more on who controls the systems that influence how products are discovered, marketed and purchased. Amazon found those opportunities in cloud computing, advertising and subscriptions. Walmart sees them in advertising, marketplace services, memberships and data monetization.”

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