Amazon to invest $150bn in data centers for AI growth

Amazon is preparing to inject approximately $150 billion into data centers over the next 15 years, according to reports. This significant financial injection aims to fortify the capabilities of the cloud-computing giant, anticipating a surge in demand for AI applications and diverse digital services.

Bloomberg indicates that this investment is a strategic move to assert dominance and uphold Amazon’s top spot in the cloud services domain. Presently, Amazon holds approximately double the market share of its nearest rival, Microsoft Corp.

An Amazon representative verified to ReadWrite that these figures stem from recent infrastructure updates listed on the company’s website.

Last year marked Amazon Web Services‘ slowest sales growth to date, attributed to corporate clients cutting expenses and delaying upgrades. With spending starting to pick up again, Amazon is actively acquiring land and energy resources to support its energy-demanding operations.

Bloomberg’s estimations reveal that over the past two years, Amazon has committed $148 billion to construct and manage data centers worldwide. The company’s plans include enlarging server farm sites in northern Virginia and Oregon while exploring new areas like Mississippi, Saudi Arabia, and Malaysia.

Despite its expansion efforts, AWS experienced a 2% decline in data center investments in 2023, marking its first decrease, while Microsoft escalated its expenditures by over 50%, according to Dell’Oro Group. Nevertheless, Amazon’s Chief Financial Officer revealed last month a forthcoming increase in capital investments this year to drive AWS’s expansion, including projects focused on artificial intelligence.

“As we look forward to 2024, we anticipate capex to increase year over year, primarily driven by increased infrastructure capex to support growth of our AWS business, including additional investments in generative AI and large language models,” said CFO Brian Olsavsky.

As Amazon expands its data centers to meet the rising demand for corporate services, its emphasis on advanced, high-value chips is poised to deliver the significant computational capabilities required for the anticipated surge in generative AI.

According to reports, Amazon is forging ahead with the development of tools to rival OpenAI’s ChatGPT and has established partnerships with multiple firms to bolster its AI services leveraging its server infrastructure.

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