Dive Brief:
- Amazon will invest 8 billion pounds ($10.4 billion) expanding AWS’s U.K. footprint through 2028, the company announced Wednesday. The money will go toward building, operating and maintaining cloud data centers, the company said.
- AWS has already spent 3 billion pounds ($3.9 billion) bulking up its cloud presence in the region between 2020 and 2023. The new buildouts increase the hyperscaler’s total investment in the region to 11 billion pounds ($14.4 billion) this decade.
- As the race to capture enterprise AI workloads intensified, AWS poured more than $50 billion into U.S-based data centers and committed 7.8 billion euro ($8.5 billion) to a sovereign cloud region in Germany during the first half of 2024. The company announced additional buildouts in Japan, Mexico, New Zealand, Saudi Arabia, Singapore and Taiwan this year.
Dive Insight:
As AI workloads devour cloud compute resources, hyperscalers have opened their coffers in a race to ramp up capacity — and grow market share.
AWS remains the largest cloud provider, with 32% of the global market, followed by Microsoft and Google at 23% and 12%, respectively, according to Synergy Research Group’s most recent analysis.
While the trio’s balance of power has remained relatively stable over the last several years, the addition of AI to the menu of services has increased demand, pushing annual cloud spending to $800 billion this year, IDC forecasted in July. At the current rates of expansion, the technology market research firm expects that number to double by 2028.
AWS is experiencing the surge firsthand, Amazon President and CEO Andy Jassy said last month during an earnings call. Jassy led AWS prior to succeeding Jeff Bezos as CEO of Amazon in 2021.
“The reality right now is that while we’re investing a significant amount in the AI space and in infrastructure, we would like to have more capacity than we already have today,” Jassy said. “We have a lot of demand right now.”
AWS reported $30.5 billion in 2024 capital expenditures through June 30 and expects to top that during the second half of the year, CFO Brian Olsavsky said during the call. Infrastructure investments accounted for most of the spending, he said.
Amazon opened its U.K. region in December 2016. The new investment will build on a foundation of three existing availability zones, two edge locations, and a regional edge cache currently operating in the region, the announcement said.
AWS’s hyperscale rivals have also been active in the region.
Microsoft announced plans to expand Azure’s U.K. footprint late last year, pledging 2.5 billion pounds ($3.3 billion) to a three-year plan to build sites in London, Wales and potentially Northern England. Google committed $1 billion to building a U.K. data center in Waltham Cross, Hertfordshire in January.