Amazon Bets Big on AI

Amazon logo | Photo by Nathan Stirk/Getty Images

Amazon is investing billions of dollars in data center infrastructure, in part to secure its position as a top player in AI.

Over the next 15 years, the e-commerce giant intends to spend nearly $150 billion on data centers, reported Bloomberg. The massive investment is being undertaken to serve the growing expected surge in demand for AI and other services.

In 2022, the global artificial intelligence market was valued at nearly $137 billion. By the end of the decade, it is estimated to hit over $1.8 trillion, or over 13 times its value in 2022. For their part, companies like Amazon are rapidly building supporting infrastructure for the anticipated gold rush.

As part of Amazon’s investment, server farm hubs in northern Virginia and Oregon will be expanded. The company will also build new facilities in places as diverse as Mississippi, Saudi Arabia, and Malaysia, reported Bloomberg.

Amazon Web Services (AWS), the company’s cloud computing arm, is already reportedly used by nearly 1.5 million businesses. Presently, Amazon is the largest player in the cloud services market, with Microsoft in second.

In the fourth quarter of 2023, Amazon held 31% of the entire cloud computing market, down slightly from the 33% one year earlier.

While much of Amazon’s investment is driven to support the growing demand for file storage and databases, it will also boost the computing power needed for the potential AI boom. The company is building AI tools to compete with OpenAI, the maker of ChatGPT, of which Microsoft is a part owner.

AWS is already the backbone for other companies providing AI services, helping the company to further entrench its position in the industry.

Expanding server space is not without challenges, as server farms are energy-intensive. In Oregon, for example, the power used by AWS server farms exceeded the maximum allowable amount of hydroelectric power allocated to the local utility, according to Bloomberg. As a result, the utility was forced to purchase electricity produced by natural gas.

To solve the challenge, Amazon continues seeking out acreage and power sources wherever possible. It is even setting up server facilities here in Texas, reported Bloomberg.

The company recently received zoning approval to build a data center and electrical substation beside a delivery depot in Round Rock. Should the project ultimately proceed, it would mark the first time Amazon has placed both facilities on the same piece of property, according to Bloomberg, and help the company overcome some of its energy hurdles.

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