Amazon to Invest $10.5 Billion in UK for Cloud, AI Infrastructure

By Kimberley Kao

Amazon plans to spend about $10.5 billion over the next five years in cloud and artificial intelligence infrastructure in the UK, as global tech companies boost their data-center footprints amid a boom in demand for artificial-intelligence computing.

Amazon Web Services, the U.S. tech giant's cloud-computing arm, said Wednesday that it will make an investment of 8 billion pounds, the equivalent of $10.46 billion, through 2028 to build and operate data centers in the UK to meet rising demand for cloud technology and services.

AWS is Amazon's most profitable unit and its second-quarter results showed the segment's net sales grew about 19% from a year earlier to a higher-than-expected $26.28 billion.

UK Chancellor of the Exchequer, Rachel Reeves described Amazon's latest investment as "the start of the economic revival and shows Britain is a place to do business."

"The next few years could be among the most pivotal for the UK's digital and economic future," given the growing adoption of cloud computing and AI technologies by businesses, Tanuja Randery, Vice President and Managing Director for Europe, Middle East & Africa at AWS said in a statement.

Like many top tech companies, Amazon has been ramping up its spending on the data centers, real estate and chips needed to meet the surging demand for computer power that has come with the rise of AI. Amazon's purchases of property and equipment, a measurement of its capital spending, was $17.62 billion in the second quarter. That was over 50% higher than the year-earlier level and the highest quarterly expenditure since 2021.

Chief Executive Andy Jassy has reoriented the company to focus on AI innovations and to catch up with Microsoft, Google and others in the space.

Since the start of 2024, AWS has earmarked over $50 billion in investments overseas in the coming years, in countries including Germany, Japan, Singapore, Mexico and Saudi Arabia.

This year, rival Microsoft also announced billions in investments for its cloud and AI infrastructure in Europe, including in Sweden, Germany and France.

AWS first launched an AWS Region, or a cluster of data centres, in the UK in December 2016, it said, and has invested over 3 billion pounds since 2020. Wednesday's announcement will bring AWS's total planned investment in the country to over 11 billion pounds.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

September 11, 2024 00:48 ET (04:48 GMT)

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