MW Amazon wants to be a satellite powerhouse. For now, the effort is a financial black hole.

By William Gavin

As Amazon prepares to launch 32 satellites into orbit on Thursday, investors have been surprised by how much the company is spending on its Leo business

While Amazon gets a lot of attention for its AI spending, the company is also pouring money into satellite endeavors.

Amazon.com on Thursday plans to make a small step toward its goal of rivaling SpaceX and other satellite-internet providers.

But for right now, the fledgling business is a big financial drag on the company.

Amazon (AMZN) has invested more than $10 billion in Amazon Leo, its satellite-internet subsidiary, and has committed billions of dollars more to develop a business that will start by providing enterprise customers with high-speed internet. On a postearnings call with investors last week, Amazon executives said the company would spend an extra $1 billion more on the venture than it did a year earlier.

Most of Amazon's planned $200 billion in capital expenditures is expected to be focused on artificial-intelligence infrastructure. However, the accelerated focus on Leo was the "surprise investment" detailed in the company's earnings report, Morgan Stanley analyst Brian Nowak said in a Feb. 6 note to investors.

Read: Amazon's stock drops as investors question whether $200 billion can buy an AI edge

While Nowak expects Amazon to begin capitalizing most of the costs by the fourth quarter, he noted that shareholders aren't as forgiving without clearly defined returns on investment.

"Leo will be back in focus until it signs more quantifiable contracts later this year, or until [Amazon] begins beating profit numbers by margin in spite of Leo," Nowak added.

Leo, formerly known as Project Kuiper, was revealed just weeks before Elon Musk's SpaceX launched the first 60 satellites used for its Starlink satellite megaconstellation in May 2019. It's still trying to catch up to Starlink, which has about 9,600 satellites in orbit and some 9 million customers.

Meanwhile, Amazon has only 179 satellites in orbit, according to the astrophysicist Jonathan McDowell. Last November, the company said it would start offering select enterprise customers a preview of its services ahead of a wider rollout expected to begin later this year.

"Dozens" of commercial agreements have already been signed with partners that want to use Leo, including JetBlue Airways $(JBLU)$ and AT&T $(T)$, according to Amazon CEO Andy Jassy. Two firms, Dubai-based Elcome and U.S.-based MTN, said on Tuesday that they had signed deals to offer Leo to the commercial maritime sector as resellers.

On Thursday, Amazon plans to send 32 satellites into low-Earth orbit aboard one of Arianespace's rockets. It's the first of 18 launches Amazon has ordered from the French company, which will help it close a major bottleneck preventing it from scaling.

Leo is "producing satellites considerably faster than others can launch them," the company wrote in a Jan. 30 filing with the Federal Communications Commission.

That's why Amazon is seeking either a 24-month extension or a waiver of its July 30 deadline to put half of its first-generation system's 3,232 satellites into orbit. Just about 700 satellites are expected to be operational by that time.

In the FCC filing, Amazon pointed to a series of delays related to its launch partners - including the United Launch Alliance, a joint venture between Boeing $(BA)$ and Lockheed Martin (LMT) - plus other factors. Amazon was only able to carry out seven out of more than 20 launches it had scheduled for 2025, according to the filing.

The company said it has more than 100 missions scheduled through the first quarter of 2029, with each launching dozens of satellites into orbit. It has until July 30, 2029, to finish that system, according to filings.

On Tuesday, Amazon announced that the FCC had permitted it to deploy another 4,500 satellites. That includes 3,212 satellites for a second-generation system and 1,292 spacecraft that will focus on covering the Earth's polar regions.

At least half of those Gen-2 satellites need to be operational by Feb. 10, 2032, with the remainder completed by Feb. 10, 2035, the FCC said. The agency gave the same deadlines for the polar satellites.

"Gen 1 performance is impressive on its own, but lots to look forward to with Leo Gen 2: More capacity, more coverage (including polar) and additional throughput," Amazon Leo Vice President Rajeev Badyal said in a statement posted on social media.

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-William Gavin

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February 12, 2026 07:00 ET (12:00 GMT)

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