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Amazon will “invest $150 billion in data centers” to promote the development of artificial intelligence

Amazon is reportedly preparing to invest nearly $150 billion in data centers over the next 15 years. This massive financial commitment will provide the cloud computing giant with the necessary resources to cope with the expected growth in demand for artificial intelligence applications and various digital services.

Bloomberg reported that the investment is a strategic demonstration of its dominance and aims to maintain Amazon’s leadership in cloud services. Amazon’s current market share is about twice that of its closest rival, Microsoft Corp.

However, Amazon Web Services experienced its slowest sales growth on record last year as enterprise customers cut back on spending and postponed upgrades. Now, as spending begins to rebound, Amazon is scrambling to secure land and energy for its energy-intensive operations.

Bloomberg said that over the past two years, its calculations show that Amazon has committed $148 billion to the construction and operation of global data centers. The company aims to expand its server farm locations in northern Virginia and Oregon and enter new regions such as Mississippi, Saudi Arabia and Malaysia.

Despite the expansion, AWS’s data center investment fell 2% in 2023, the first decrease even as Microsoft increased spending by more than 50%, Dell’Oro Group reported. However, Amazon’s chief financial officer announced last month that it would increase capital investment this year to drive AWS’s expansion, including projects related to artificial intelligence.

Chief Financial Officer Brian Olsavsky said: “Looking forward to 2024, we expect capital expenditures to increase year over year, primarily due to increased infrastructure capital expenditures to support the growth of our AWS business, including additional investments in generative artificial intelligence and large language models .”

Amazon’s AI expansion plans

While Amazon’s data center expansion is aimed at meeting growing demand for enterprise services, its focus on complex, high-cost chips will provide the massive computing power needed for the expected growth in generative artificial intelligence.

There are reports that Amazon is developing proprietary tools to compete with OpenAI’s ChatGPT and has formed partnerships with several companies to use its servers to enhance its artificial intelligence services. As a result, Amazon is expected to generate tens of billions of dollars in AI-related revenue.

Amazon has been contacted for further comment.

Featured Image: Canva / Rio Web Summit

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