Amazon invests $150bn in AI growth with data centers
Editorial StaffTL/DR -
Amazon plans to invest approximately $150 billion over the next 15 years in data centers to manage the anticipated rise in demand for AI applications and digital services. This move is part of Amazon's strategy to maintain its leading position in the cloud services sector, despite experiencing its slowest sales growth on record in the previous year. Amazon's expansion plan includes developing more sophisticated, high-cost chips for AI use, apart from expanding its server farm locations globally.
Amazon's Major Investment in Data Centers
Amazon is anticipated to invest approximately $150 billion in data centers over the next 15 years. This substantial investment will provide the e-commerce giant with necessary resources to cater to the predicted increase in demand for AI applications and digital services.
According to Bloomberg, this investment reaffirms Amazon's dominance in the cloud services sector, where it holds nearly twice the market share of its closest competitor, Microsoft Corp.
Despite recording its slowest sales growth last year, Amazon Web Services is now focusing on securing land and energy for its operations. The company plans to expand its server farms in northern Virginia, Oregon, and new locations such as Mississippi, Saudi Arabia, and Malaysia.
However, AWS saw a 2% decrease in its data center investments in 2023, even as Microsoft increased its expenditures by over 50%, as reported by Dell’Oro Group. AWS is expected to ramp up its investments this year, especially in projects related to artificial intelligence.
Amazon's AI Expansion Plans
Beyond catering to corporate needs, Amazon's data center expansion also targets the upcoming surge in generative AI by focusing on high-cost, highly sophisticated chips. Amazon is reportedly developing tools to compete with OpenAI’s ChatGPT and enhancing its AI services through various partnerships, expecting to generate billions in AI-related revenue.
Featured image: Canva / Web Summit Rio
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