AWS bullish about GenAI demand with $11B data center investment in GeorgiaAWS bullish about GenAI demand with $11B data center investment in Georgia

Amazon Web Services (AWS) plans to inject $11 billion into expanding its data center infrastructure in Georgia to support growing demand for AI and cloud technologies.

"Generative AI is driving increased demand for advanced cloud infrastructure and compute power, and AWS's investments will support the future of AI from data centers in Georgia," according to a statement by AWS.

AWS said its data centers are capable of efficiently using GPUs for both traditional workloads or AI and machine learning models.

A banner year for data center equipment

Last year was a banner period for the data center gear market due to generative AI investments, according to Synergy Research Group. In 2024, total data center spending for hardware and software increased 34% from the previous year, "which is an unheard-of increase in this market," according to a statement by John Dinsdale, a chief analyst at Synergy Research Group.

"GPUs and generative AI systems lit a fire under the market in 2024, resulting in record growth rates for the industry. While the ongoing success of public cloud has been the main driving force behind data center investments for well over a decade now, no-one imagined a 2024 market for data center gear reaching over $280 billion," added Dinsdale.

Related:Spending on cloud is booming, but is telco using?

Market growth was particularly strong in sales to public cloud providers, which increased nearly 50%.

(Source: Synergy Research Group)

In the cloud service and infrastructure markets, operator and vendor revenues for the first half of 2024 hit $427 billion, an increase of 23% from the first half of 2023, according to Synergy.

While demand is up for cloud infrastructure, usage is another story. A report by Infosys revealed that telecom operators are only using about half of the cloud capacity they've purchased.

"The slow uptake can be attributed to the complexities of transitioning from legacy IT systems to cloud platforms, which often involves intricate interdependencies and customizations," according to Infosys' Cloud Radar – Telecom Industry Report.

AWS' data center investment in Georgia

AWS' investments to Butts and Douglas counties in Georgia are forecast to create over 550 new high-skilled jobs, said AWS. AWS has invested $18.5 billion in Georgia since 2010, contributed $20.1 billion to the state's gross domestic product (GDP), and it has supported 34,000 full- and part-time jobs, in addition to 44,700 indirect jobs, said the company. AWS also provides local training programs providing education on fusion splicing techniques and equipment.

"AWS is Amazon's most profitable unit and its third-quarter results showed the segment's net sales grew 11% from a year earlier to $15.33 billion. Amazon's capital expenditures jumped more than 80% to $22.62 billion during the quarter, its biggest-ever quarterly spend," wrote The Wall Street Journal.

Related:2024 in review: A bad year for public cloud in telecom

AWS expands in Thailand

AWS also announced plans today to launch a new cloud region in Thailand, which is the first AWS infrastructure region in the country and the fourteenth region in Asia-Pacific. AWS will invest over $5 billion toward the Thailand project over the next 15 years.