Amazon to spend $150 billion on datacenters for expected 'explosion in demand' for AI

Amazon plans to spend nearly $150 billion over the next 15 years on data centers, as the company expects an "explosion in demand" for AI applications and other digital, cloud-based services.

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Microsoft is the king of data centers right now, but Amazon Web Services (AWS) has been experiencing record lows in the last year as business customers reduce costs and delayed projects. The insatiable AI demand has fueled new energy for Amazon, as AWS is looking at securing land and power systems for its new data centers.

Kevin Miller, an AWS vice president who oversees the company's data centers, said: "We're expanding capacity quite significantly. I think that just gives us the ability to get closer to customers".

In a recent Bloomberg tally, Amazon has committed to spending $148 billion to build and operate data centers across the planet. Amazon plans to expand its server farm hubs in northern Virginia and Oregon and new territories, including Mississippi, Saudi Arabia, Malaysia, and Taiwan.

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Amazon's big spending on data centers will be to meet the demand for corporate services like file storage, databases, and all things AI. The new facilities will be filled with advanced, next-generation (and expensive) new chips, which will provide the immense computing power that future-gen AI hardware and software will need.

Microsoft is a close partner of OpenAI and Google, leaving Amazon without a huge AI service. However, the company is building its own tools to compete against ChatGPT, partnering with other companies to power its AI services with its AWS servers. Amazon plans to spend "tens of billions more in those states," but Bloomberg reports it's "getting harder to secure electricity there."

Data centers require immense amounts of power, and with more facilities going up around the state, power is hard to find. In Oregon, Amazon server farms use so much electricity that it exceeds the local utility's share of hydroelectric power, forcing the company to buy electricity generated by natural gas.

AWS agreed to spend $650 million to acquire a data center campus connected to a 40-year-old nuclear power plant in Susquehanna River in Pennsylvania. In February 2024, AWS said it would spend around $10 billion on two data center facilities in Mississippi, which is the largest corporate project in state history.