Amazon Investing $50B in Data Centers for U.S. Government

Amazon’s next deep dive into the data center sector has one core user in mind: the United States government.

The tech giant is planning to invest $50 billion to improve its artificial intelligence and computing capabilities for government customers of its cloud business, the Wall Street Journal reported.

The investment will go towards building out data centers with advanced technology. It will add roughly 1.3 gigawatts of capacity for government customers, who will be able to build their own AI systems and handle larger amounts of data; in addition to accessing more AI tools, customers will also be able to utilize hardware from Amazon Web Services and Nvidia.

“Our investment in purpose-built government AI and cloud infrastructure will fundamentally transform how federal agencies leverage supercomputing,” AWS chief executive officer Matt Garman said in a statement.

Amazon added 3.8 gigawatts of data center capacity over a 12-month period ending in the third quarter, Amazon chief executive officer Andy Jassy said in an earnings call. The company is expected to hit $125 billion in capital spending this year and increase that number next year.

This month, Amazon paid a whopping $700 million for a future data center campus in Northern Virginia. The deal is one of the largest land deals in U.S. history and a sign that Big Tech’s land appetite in the region hasn’t cooled.

Data centers are all the rage worldwide, despite chatter about a potential AI bubble.

Vantage Data Centers recently completed an equity investment of $1.6 billion in its Asia-Pacific platform, led by an affiliate of Singapore’s GIC sovereign wealth fund and a subsidiary of the Abu Dhabi Investment Authority. Part of that investment went towards Vantage’s latest acquisition in the region: Sedenak Tech Park, a hyperscale data center in Johor, Malaysia.

Canadian investment giant Brookfield, meanwhile, is raising a $10 billion equity fund to build and buy the infrastructure behind artificial intelligence, from hyperscale data centers to dedicated power generation and chip manufacturing sites. Half the target is already spoken for due to heavyweight backers such as Nvidia and the Kuwait Investment Authority.

— Holden Walter-Warner