- Amazon is set to invest over $100B in AI-focused data centers over the next 10 years, aiming to support Amazon Web Services.
- The e-commerce giant already announced $50B in new U.S. data center developments in 1H24, with significant projects in VA, IN, MS, and PA.
- Despite being the largest cloud provider, Amazon faces growing competition from Microsoft and Google in the AI cloud services sector.
According to WSJ, Amazon (AMZN) is making a significant push into AI infrastructure, planning to invest over $100B in new data centers over the next decade, as reported on Bisnow. The expansion aims to reinforce AWS and fend off increasing competition in the cloud services and AI landscape.
Big, Bold Bet
Amazon’s new investment strategy includes at least 216 data center buildings slated for completion over the next several years.
The $100B commitment comes as the e-commerce giant faces more pressure than ever to maintain its cloud computing leadership while competitors like Microsoft (MSFT) are quickly advancing AI technologies.
Domestic and International
Much of Amazon’s data center investment is concentrated in the U.S., with $35B dedicated to various projects across Virginia, in particular. This includes new developments in less traditional data center locations such as King George and Louisa counties.
Additional significant investments include an $11B data center campus in Indiana, a $10B project in Mississippi, and a major campus near a nuclear power plant in Pennsylvania.
Outside the U.S., Amazon is also expanding its data center footprint internationally with billions of dollars committed to new projects in Taiwan, Singapore, and Germany since the beginning of the year.
Why It Matters
Amazon’s investment surge reflects a broader trend among ‘hyperscale’ cloud providers, which are all ramping up data center spending to meet anticipated AI-driven demand.
For now, AWS remains the largest cloud provider, holding 31% of the global market share. But its lead has narrowed noticeably over the past few years, as competitors like Microsoft and Google (GOOGL) gain ground.
Microsoft’s aggressive AI strategy, including its partnership with OpenAI and rapid integration of AI into its Azure cloud products, has increased its market share by over 2% since mid-2023.
