Technologies

Should You Upgrade to the iPhone 14? Not So Fast

You may want to think twice before upgrading to the iPhone 14 right now.

You might be eyeballing the iPhone 14 lineup — especially the Pro, which introduces a sharper camera and an always-on display. But if you don’t absolutely need a new phone right now, you’re better off waiting.

Apple usually announces new iPhones in September, which means the rumored iPhone 15 and iPhone 15 Pro could be right around the corner. Those phones are expected to come with USB-C charging for the first time among other notable changes, such as solid state buttons on the Pro models. Apple sometimes discounts older iPhones after introducing new ones, as it did with the iPhone 13 lineup last year and may do the same with the iPhone 14 this year. So whether you care about having the newest iPhone or not, it’s probably in your best interest to wait a little while longer.

Purchasing decisions will always vary depending on budget, how well your phone works right now and your personal needs, so there’s no simple answer that works for everyone. But if you’re in need of a new phone right away and can’t wait, here are the biggest differences between the iPhone 14 lineup and previous iPhone generations to help you make a decision.

What’s new in the iPhone 14

The $799 (£849, AU$1,399) iPhone 14 brought modest improvements but not game-changing ones. Those changes include nitty-gritty camera improvements and the support for satellite-based emergency messaging.

The iPhone 14 also has a new internal design, with simpler access to internal components, making it easier to repair than previous models. iFixit, a website that disassembles tech products and assesses how easy they are to fix, called it «the most repairable iPhone in years.» And if you want these features in a larger size, the iPhone 14 Plus starts at $100 more, at $899.

Apple saved its most interesting new features for the Pro lineup, including the Dynamic Island that replaces the notch, the new A16 Bionic processor and a 48-megapixel main camera sensor.

Apple’s Newest Releases

iPhone 14 vs. iPhone 13, 13 Pro, 13 Pro Max

The iPhone 14 lineup introduced new features such as car-crash detection, the removal of the physical SIM card for US phones, and enhanced cameras on the rear and front. Despite those changes, iPhone 14 isn’t different enough to justify upgrading from the iPhone 13. And even though Apple finally got rid of the infamous notch in the Pro models, the 14 and 14 Plus still have one — it’s the same smaller notch that debuted on the iPhone 13 series. In fact, the iPhone 14 represents «one of the most minimal year-over-year upgrades in Apple’s history,» according to CNET’s Patrick Holland, who reviewed Apple’s latest phones.

The iPhone 14 and iPhone 14 Plus have the A15 Bionic chip from iPhone 13 Pro and iPhone 13 Pro Max. The 14’s screen looks exactly like the one on the 13. Perhaps the most prominent change was the introduction of a larger version of the iPhone 14 called the iPhone 14 Plus, which has a 6.7-inch screen like the Pro Max. That means you no longer have to splurge on Apple’s most expensive iPhone if you want the largest screen possible.

Of course, the iPhone 14 is still highly rated, but we recommend skipping this upgrade. If you need a new iPhone and can’t wait for the iPhone 15, we suggest going for an iPhone 14 Pro or iPhone 14 Pro Max if you can afford it. These phones are expensive, but provide access to some salient changes — namely a high-refresh rate display, Apple’s new Dynamic Island multitasking bar, an always-on display as well as better cameras among other features.

The bottom line: If you have an iPhone 13 or 13 Pro, don’t upgrade to the iPhone 14. But if you are determined to get a new phone, go for the iPhone 14 Pro or 14 Pro Max, especially if you must have the Dynamic Island right now.

iPhone 14 vs. iPhone 12, 12 Pro

Even though the iPhone 12 lineup was released in 2020, it still shares many similarities with Apple’s latest phones. Both the iPhone 12 and iPhone 14 support 5G, run on fast processors, offer great cameras and include MagSafe accessory compatibility.

Since the iPhone 14 is more of a refresh than a major upgrade, we recommend hanging onto your iPhone 12 if it’s still in good condition and waiting for the iPhone 15. You can still take advantage of the iPhone’s latest software when iOS 17 comes out in the fall, bringing new features like Standby mode for turning your phone into a mini smart display and improvements to the messaging app among other additions.

The iPhone 14 received a few notable camera upgrades, like a larger sensor, a new lens with a faster aperture, improved photo processing and Action Mode which makes the movements in videos look smoother when you record them.

But the iPhone 12’s cameras remain excellent even though they are almost 3 years old. The iPhone 12 has a 12-megapixel dual camera system, while the iPhone 12 Pro includes a third camera with a telephoto lens. Check out our iPhone 12 review to see how the cameras held up when CNET put them through the paces.

It’s worth remembering that you get more noticeable upgrades with the iPhone 14 Pro and Pro Max. These include everything that’s new in the 14, as well as an upgraded main camera with a larger 48-megapixel sensor, an ultrawide camera that allows you to take Macro photos and a third camera with a telephoto lens. If you can get a good trade-in deal that significantly knocks down the iPhone 14 Pro’s price, upgrading from the regular iPhone 12 is a decent step-up.

The bottom line: You should wait for the iPhone 15 since the iPhone 14 isn’t dramatically different. However, the iPhone 14 Pro and 14 Pro Max bring more significant changes that could be worthwhile if you can snag a good trade-in deal.

Read more: All The «New» iPhone Features That Have Been on Android For Years

iPhone 14 vs. iPhone 11, 11 Pro

If you’re using an iPhone 11, we recommend upgrading. Since Apple’s new iPhones may be right around the corner, you should still wait a little longer if you can. But if you do need a new phone right now and can get the iPhone 14 at a solid trade-in discount, there are plenty of improvements to look forward to.

In the last three or so years, Apple has made enough changes to features including battery life, performance, screen quality, cameras and durability to merit buying a new iPhone.

Upgrading to the iPhone 14 will get you 5G support, more storage (128GB at the base level versus 64GB) a better main camera with a wider aperture lens, new video shooting options like Action mode and Cinematic mode, a better selfie camera with Night mode and Apple’s Photonic Engine processing, compatibility with Apple’s MagSafe accessories, longer battery life and faster performance. That’s in addition to car-crash detection and Apple’s new emergency satellite messaging feature.

Most of the photography and videography improvements are dramatic changes compared to the iPhone 11. And the longer battery life and additional storage space are welcomed upgrades that you’ll notice on a daily basis.

As previously mentioned, if you go for the 14 Pro instead, you get a new 48-megapixel main camera, a closer 3x optical zoom versus the 11 Pro Max’s 2x zoom, the Dynamic Island instead of the notch and numerous other upgrades like an always-on display.

The bottom line: The iPhone 14 lineup includes enough changes to justify upgrading from the iPhone 11. But if your phone is still in good condition and you’re satisfied with it, wait a little while longer for the iPhone 15 (or a newly discounted iPhone 14).

iPhone 14 vs. iPhone XS, XS Max, XR

If you bought the iPhone XS, XS Max or XR at launch, that means your phone is almost 5 years old and is probably starting to feel sluggish. That alone makes a strong case for upgrading, but you should probably still wait for the iPhone 15 if you can.

However, if you need a new phone right now, there’s plenty to gain from upgrading. Compared to the iPhone XS, the iPhone 14 provides six hours of additional battery life (according to Apple’s estimates). In addition to everything that’s new in the iPhone 14 specifically, you’ll also get other upgrades Apple has added to the iPhone over the past few years.

Those include 5G support, more storage (again, you get 128GB versus 64GB), faster performance and a better camera. The iPhone XS generation lacks Night mode for taking clearer pictures in the dark, and it also doesn’t have Deep Fusion, which is Apple’s name for its image processing technique that improves detail and clarity in darker environments. The XS’s front camera has a lower 7-megapixel resolution compared to the larger and newer 12-megapixel sensor on the iPhone 14. If you’re upgrading from an iPhone XR, you’ll also get an additional camera with an ultrawide lens for taking broader group shots for the first time.

The iPhone 14 also has a larger 6.1-inch screen compared to the iPhone XS’ 5.8-inch display (the iPhone XS Max has a 6.5-inch screen, while the XR’s screen is also 6.1 inches). The design has also changed quite a bit over the past four years; newer models have flat edges, a slightly smaller notch, different finishes and a new «squircle»-shaped camera module that replaces the pill-shaped rear camera cutout. So your phone will not only feel more modern, but it’ll look newer, too.

The bottom line: If you have an iPhone XS, XS Max or XR, it’s definitely worth upgrading. You get a noticeable boost in camera quality, battery life and performance among other areas. But again, remember that the iPhone 15 and a newly discounted iPhone 14 may be arriving in just a few weeks.

iPhone 14 vs. iPhone X

The iPhone X is almost 6 years old, which means it probably feels slow and its battery life isn’t what it used to be. With an iPhone 14, you’ll notice a major upgrade in both categories, as well as design, improved durability, connectivity and camera quality. But if you’re in a position to do so, you should wait and see what the expected iPhone 15 has to offer.

If you can’t wait until September, which is when Apple typically releases new iPhones, here’s what you’ll get by upgrading to the iPhone 14. The iPhone X runs on a much older A11 Bionic chip that’s now roughly 6 years old, while the iPhone 14 runs on Apple’s much more recent A15 Bionic processor. The iPhone 14 Pro and Pro Max run on Apple’s newer A16 Bionic chip. Both new processors are way ahead of the A11 chip, which only has a two-core neural engine compared to the A15 Bionic’s 16-core neural engine.

The iPhone’s neural engine powers tasks that rely on machine learning and artificial intelligence, which are becoming a bigger part of the iPhone experience. Things like app suggestions in the App Library and Apple’s Translate app rely on machine learning to function, which indicates that the iPhone X may struggle to keep up with newer capabilities.

The iPhone X also has a dual-lens camera similar to that of the iPhone XS, meaning it’s missing the iPhone 14’s camera hardware improvements in addition to Night mode, Deep Fusion and the ability to control depth-of-field and blur levels in Portrait mode. Like the iPhone XS, you’re only getting a 7-megapixel front camera compared to a 12-megapixel selfie camera on Apple’s newer phones.

Apple’s more than five-year-old iPhone also has shorter battery life, with Apple estimating it should last for 13 hours when playing back video compared to 20 hours on the iPhone 14. The iPhone 14’s 6.1-inch screen is bigger than the 5.8-inch display on the iPhone X, and it should also be brighter since it can reach 800 nits of max brightness compared to the iPhone X’s 625-nit screen.

The iPhone 14 supports Dolby Atmos and spatial audio playback, while the iPhone X just has stereo playback. That’s probably not a deal-breaker, but might be crucial if you watch a lot of video on your phone without headphones.

And of course, there’s the benefit of getting car-crash detection, Apple’s new emergency SOS messaging via satellite option, better water resistance (up to 6 meters for 30 minutes versus 1 meter), 5G support, more storage space, Ceramic Shield for the display, a refreshed design and the option to use MagSafe accessories on the iPhone 14.

The bottom line: If you have the iPhone X, it’s time to upgrade. The iPhone 14 will feel new in just about every way, from the camera to performance, battery life and the way it looks and feels. And the iPhone X doesn’t support Apple’s upcoming software upgrade, iOS 17, so you’ll be missing out on new features. But if you’ve waited this long, it’s a good idea to hang in there just a little longer for the expected iPhone 15.

iPhone 14 vs. iPhone 8, 8 Plus

The iPhone 8 generation has Apple’s legacy iPhone design, which is fitting for a phone that’s now almost 6 years old. If you have an iPhone 8 and are considering an upgrade, many of the reasons to do that are the same as the reasons to upgrade from the iPhone X. The processor is getting old, which could make it harder to use newer iPhone features that rely on machine learning. The cameras are outdated and lack features like Night mode (the smaller iPhone 8 doesn’t have Portrait mode either, since it only has one lens). And it doesn’t support iOS 17. By upgrading, you’ll get more storage, significantly longer battery life, new software, support for 5G connectivity and MagSafe accessories, too.

Again, remember that the iPhone 15 could debut next month, meaning it’s a good idea to wait if you can. But if you need a new phone immediately, the biggest difference you’ll notice by upgrading to the iPhone 14 comes down to design, which is much more than just an aesthetic upgrade. Phones with Apple’s more modern edge-to-edge screen trade Touch ID for Face ID, which lets you unlock your phone and authenticate payments just by looking at your device. If you prefer Touch ID over Face ID, especially since it’s difficult to use Face ID while wearing a mask, you might want to at least consider upgrading to the $429 iPhone SE, since it has the same processor as the iPhone 13, 5G compatibility and plenty of photography improvements inside a similar body to the iPhone 8.

Upgrading to the iPhone 14 has a noticeably large jump in display size and quality. Since newer phones like the iPhone 14 don’t have a home button, there’s more room for Apple to expand the screen without making the device feel cumbersome. The iPhone 14’s screen is even larger than the iPhone 8 Plus’ 5.5-inch screen despite the device itself feeling more compact. (And for more perspective, consider that the iPhone 13 Mini has a 5.4-inch display). If you go for the 14 Pro you get another big change: the Dynamic Island, which transforms the notch area into an area for viewing alerts, system notifications and apps running in the background like Spotify or Apple Music.

From personal experience, switching from an iPhone 8 (which has a 4.7-inch screen) to the iPhone 12’s 6.1-inch display makes reading, checking email and watching videos much more comfortable. The screen isn’t only larger, but it’s also more vibrant with better contrast since it uses an OLED display rather than LCD.

The bottom line: The iPhone 14 is a huge jump from the iPhone 8. Everything about this phone will feel fast and new: the much larger and bolder screen, Face ID, the speedier processor, its longer battery life and of course the substantially upgraded cameras. Of note however, if you really want to get a newer iPhone but keep the iPhone 8’s design, trade up to the current 2022 iPhone SE. And remember that the iPhone 15 and a newly discounted iPhone 14 could be arriving soon, so it’s wise to wait a little longer if possible.

iPhone 14 vs. iPhone 7, 7 Plus

If you have an iPhone 7, it’s time to upgrade. It’s almost 7 years old, and it shows in everything from the processor to the camera and storage space. The iPhone 7 doesn’t support iOS 17, providing another incentive for acquiring a newer device. If you can’t afford to wait for the iPhone 15, which is expected to debut in September, here’s what you’ll get by upgrading to the iPhone 14.

While we generally recommend choosing the iPhone 14 Pro over the iPhone 14 in most cases, coming from a phone this old, means you’ll find plenty that’s new in the iPhone 14.

The iPhone 7 runs on an aging A10 Fusion processor, which doesn’t even have a neural engine and is years behind Apple’s latest technology. It has a single-lens camera without Portrait mode, while the 7 Plus has two cameras. But those cameras lack many modern features like Night mode and Portrait Lighting, which adds specific lighting effects to your portraits.

Similar to the iPhone 8, the iPhone 7 series includes Touch ID and comes in either 4.7- or 5.5-inch screen sizes. But since the iPhone 7 is a year older than the iPhone 8, it’s also missing wireless charging, which means you must plug it in to charge.

If you’ve owned an iPhone 7 for several years, it’s probably bursting at the seams since it has substantially less storage space. The entry-level iPhone 7 only came with 32GB of space, which is a quarter of capacity available on the cheapest iPhone 14.

The iPhone 14 brings major gains in nearly every aspect. The standard model has a larger, bolder and brighter bezel-free 6.1-inch screen that still feels compact since it doesn’t have a home button. It runs on Apple’s A15 Bionic processor, which is better equipped to handle newer iOS features. And it has a drastically improved dual-lens camera with a larger main camera sensor and advanced features like the new Cinematic mode for video and Night mode. Plus, Apple’s estimates indicate it’ll offer seven hours of additional battery life during video playback, which is a huge bump.

The bottom line: If you’re still holding onto your iPhone 7, there’s no question that you’re due for an upgrade. A better screen, compatibility with iOS 17, longer battery life and more advanced cameras are just a few of the gains the iPhone 14 has to offer over the iPhone 7. And similar to my recommendation with the iPhone 8, if you really want to keep the home button and save some money, consider the iPhone SE. It gives you more recent performance upgrades while keeping a similar phone style. Just remember that the iPhone 15 is expected to arrive in just a few weeks, which also means the iPhone 14 might see a price cut soon. So it’s worth waiting just a bit longer if you can.

Technologies

Investors Favor Alphabet’s AI Spending Over Meta’s Despite Both Beating Earnings Expectations

Despite both Meta and Alphabet surpassing earnings expectations and raising AI spending forecasts, investors reacted differently, with Alphabet’s stock rising 7% while Meta’s fell 7%, highlighting the market’s preference for companies with cloud infrastructure that can monetize AI investments.

On Wednesday, both Meta and Alphabet surpassed analyst expectations in their quarterly earnings, marking their most robust growth in several years. The companies also raised their annual capital expenditure projections, signaling a continued commitment to investing heavily in artificial intelligence infrastructure.

However, Wall Street responded differently to the two tech giants. Alphabet’s stock surged 7% in after-hours trading, whereas Meta’s shares dropped by 7%.

This divergence continues a pattern that has weighed on Meta during much of the generative AI expansion. Unlike Alphabet, Microsoft, and Amazon, which operate vast cloud infrastructure businesses that convert AI investments into revenue, Meta lacks such a division.

Consequently, convincing investors of the return on AI spending is more challenging for Meta CEO Mark Zuckerberg, as the benefits must primarily manifest through higher ad revenue and improved profitability.

All four major tech firms released their quarterly results on Wednesday. While Alphabet, Microsoft, and Amazon reported cloud divisions that outperformed expectations, Meta was the only one among them to see its stock decline.

Leading up to the earnings releases, Alphabet’s stock had climbed 118% over the past year, significantly outpacing Meta’s 21% gain. Amazon rose 40%, and Microsoft increased by approximately 8%.

«Google is outperforming its peers which is well reflected in the current valuation,» analysts at D.A. Davidson wrote in a report after the results, maintaining their neutral rating.

The capital expenditure figures across the board are staggering and continue to grow, partly because companies are spending more on memory due to a global shortage driven by surging AI demand.

Alphabet updated its 2026 capex guidance range to $180 billion to $190 billion, up from its previous estimate of $175 billion to $185 billion. CFO Anat Ashkenazi said the company’s 2027 capex is expected to «significantly increase» from this year’s figure.

The spending forecast was coupled with revenue growth of 20%, the fastest for any quarter since 2022. Cloud revenue soared 63%, and Alphabet said it has a backlog of $460 billion, nearly double where it was last quarter, because of demand for AI infrastructure.

Defending the Spending

Meta upped its capex guidance for the year to between $125 billion and $145 billion, from a prior range of $115 billion to $135 billion, a move the company said, «reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity.»

Similar to when Meta raised its capex forecast in October, Zuckerberg spent time on the earnings call defending the company’s hefty AI spending, pitching it as necessary for future growth while bolstering the core online ad business.

«The trend over the last few years seems clear, that we are seeing an increasing return on the amount that we can improve engagement for people and value for advertisers,» Zuckerberg said. «This encourages us to continue investing heavily in what we expect will provide increasing value over the coming years as well.»

On the revenue side, growth is more impressive than at Google. Sales jumped 33% from a year earlier, marking the strongest period for expansion since 2021.

Zuckerberg said the company is «very focused on increasing the efficiency of our investments,» and is developing custom silicon with Broadcom while investing in a «significant amount of AMD chips to complement the new Nvidia systems that we’re rolling out as well.»

Meta CFO Susan Li told analysts that the company needs to spend big on AI in order to «meet our infrastructure needs and ensure we maximize our strategic flexibility over the coming years.» The company also has to ensure it has enough computing resources to train more AI models, build more products and help its AI agent push for consumers and businesses worldwide, Li said.

She added that Meta’s recent «multi-year cloud deals and our infrastructure purchase agreements» contributed to a $107 billion jump in contractual commitments during the quarter.

Still, investors are waiting to see new revenue streams come to fruition after Zuckerberg spent the past 10 months overhauling his company’s AI strategy and bringing in high-priced talent. Earlier this month, Meta debuted Muse Spark as its first proprietary foundation model.

Alphabet, meanwhile, has been cashing in on its bets, including on homegrown chips called tensor processing units (TPUs), which are increasingly competing with Nvidia’s graphics processing units (GPUs).

CEO Sundar Pichai addressed the momentum in the chip side of the business several times on Wednesday’s call.

«There’s tremendous demand for both AI solutions as well as AI infrastructure, including massive interest in our GPU offerings, as well as TPUs,» he said.

WATCH: Meta shares sliding

Technologies

Alphabet’s Q1 Earnings Expected to Reflect Sustained Expansion, Driven by Cloud Division

Alphabet’s Q1 earnings are expected to show strong growth driven by cloud and AI advancements, with revenue projected to rise 18.7% year-over-year. The company’s stock has surged 118% over the past year, supported by Gemini AI integration and expanding cloud infrastructure investments.

Alphabet is scheduled to release its first-quarter financial results after market close on Wednesday. Below are the key metrics Wall Street anticipates, based on analyst estimates from LSEG: — Earnings per share: $2.63 — Revenue: $107.2 billion Investors are also tracking several additional figures in the upcoming report: — Google Cloud: Estimated at $18.05 billion, per StreetAccount — YouTube advertising: Estimated at $9.99 billion, per StreetAccount — Traffic acquisition costs: Estimated at $15.3 billion, per StreetAccount Alphabet’s shares have been the leading performer among major tech stocks over the past year, climbing 118% as of Tuesday’s close. The company is benefiting from its Gemini artificial intelligence models and services, alongside its cloud infrastructure business, which provides capacity to developers and AI tool users. Analysts forecast an 18.7% increase in revenue from $90.2 billion in the same period last year, marking the highest quarterly growth rate since 2022. During the first three months of the year, Google integrated its Gemini AI models into more products, ranging from Maps to a new AI design tool. Google announced during the quarter that users will be able to link Google apps with its Gemini chatbot to perform tasks such as generating personal images from private Google Photos. Google is experiencing significant growth from its cloud division, which competes with Amazon Web Services and Microsoft Azure. Revenue is projected to surge 47% from $12.26 billion in the same quarter a year ago. Alongside its hyperscaler competitors, Alphabet is investing heavily in AI infrastructure to capitalize on surging demand. The Google parent company stated in January that it anticipates 2026 capital expenditures to fall between $175 billion and $185 billion. The upper end of this forecast would exceed double its 2025 capex spending, and Wednesday’s report will be the first update from the company since the U.S.-Iran conflict began in February, causing oil prices to spike. Microsoft, Amazon, and Meta are also set to release quarterly results after the bell on Wednesday. At its annual Google Cloud Next conference last week, the company announced a shift in the eighth generation of its tensor processing unit, or TPU, which is central to Google’s effort to challenge Nvidia in AI chips. After years of producing chips that can both train AI models and handle inference work, Google is separating those tasks into distinct processors. Alphabet’s investments may also be a focus for investors. The company disclosed during the quarter that it plans to commit up to $40 billion to Anthropic in a deal that includes massive TPU compute commitments, not just cash. Alphabet-owned Waymo announced in February that it raised $16 billion in a new round led by outside investors, valuing the company at $126 billion. Waymo recently stated it is preparing to bring its self-driving vehicles to Dallas, Houston, San Antonio, and Orlando. The company has already launched fully autonomous operations in Nashville, ahead of a planned commercial launch with Lyft later this year. The company also reduced some equity stakes. Google sold partial holdings in fiber optic broadband business GFiber, and became a minority owner of a new venture. Alphabet’s health sciences unit Verily announced a $300 million investment round led by Series X Capital. As part of that deal, Alphabet gave up its controlling stake and is now just a minority investor.

Technologies

Amazon to Release First-Quarter Financials Following Market Close

Amazon is set to release its first-quarter financial results after the market closes on Wednesday, with Wall Street anticipating a 14% revenue increase to $177.3 billion.

Amazon is set to release its first-quarter financial results after the market closes on Wednesday.

Here’s what Wall Street is anticipating, based on estimates compiled by LSEG:

— Earnings per share: $1.64

— Revenue: $177.3 billion

Wall Street is also tracking other key revenue figures:

— Amazon Web Services: $36.92 billion expected, according to StreetAccount

— Advertising: $16.87 billion expected, according to StreetAccount

Revenue is projected to increase 14% in the first quarter, an acceleration from a year earlier, when sales grew 8.6% to $155.7 billion, and roughly in line with last quarter’s 13.6% growth.

Investors will be closely watching Amazon’s cloud business, where revenue is expected to jump roughly 26% from a year ago. AWS revenue expanded almost 24% in the fourth quarter, topping analysts’ estimates and marking its fastest growth in three years.

Amazon and other big tech companies have been trying to justify their hefty artificial intelligence spending, which could approach $700 billion in 2026. Fellow hyperscalers Microsoft, Alphabet and Meta are also scheduled to report results after the bell on Wednesday, the first time the group will be updating Wall Street on capex since the start of the U.S.-Iran war in February.

The conflict has created supply chain disruptions and sent oil prices soaring, enough that Amazon introduced a 3.5% fuel surcharge for some of its third-party sellers.

Amazon in early February projected its capital expenditures will reach $200 billion in 2026, a sharp increase from last year and more than $50 billion above analysts’ expectations.

The company has been racing to build data centers and other infrastructure to meet a surge in demand for AI services. Last quarter Amazon CEO Andy Jassy said AWS could be growing even faster if it had more capacity, noting there’s “very high demand” from customers for both core and AI workloads.

Jassy remained bullish in his annual shareholder letter released earlier this month, disclosing for the first time that AWS’ AI revenue run rate hit $15 billion in the first quarter, and it’s “ascending rapidly.”

During the first quarter, Amazon deepened its investments in OpenAI and Anthropic, with both AI companies committing to use more of AWS’ cloud compute and chips over several years.

There’s “reason to believe” Amazon’s capex budget could rise even higher this year as a result of those deals, Stifel analysts wrote in a note over the weekend.

“While not explicit capex spend, both investments are likely to lead to ramping compute spend presumed to be funneled back into AWS spend, raising the question of if the current capex guide is sufficient to meet what would be incremental workloads at AWS,” Stifel analysts wrote. The firm has a buy rating on Amazon’s shares.

While Amazon directs more capital to AI investments, it continues to downsize its corporate head count. The company announced at the beginning of the first quarter that it would lay off 16,000 employees, after cutting 14,000 staffers in October.

Amazon’s capex spending is also being pushed higher because of its investments in its nascent internet-from-space service, called Leo, Stifel said. The company is aiming to begin commercial service in mid-2026.

Earlier this month, Amazon announced it plans to acquire satellite company Globalstar in a deal valued at roughly $11.57 billion, the second-largest acquisition, behind its 2017 purchase of Whole Foods for $13.7 billion.

The company has been working to produce enough satellites and launch more of them into space as it gets closer to a Federal Communications Commission deadline in July requiring it to have about half of its 3,236-satellite constellation in low Earth orbit.

Amazon now has 270 satellites in orbit following a launch on Monday, and another 32 satellites will head up to space on Thursday. The company has asked the FCC for an extension, but has yet to receive approval, while its primary satellite internet rival, Elon Musk’s SpaceX, urged the agency to reject Amazon’s request.

WATCH: Amazon needs to spend more to keep AWS as premier AI play