Amazon plans to nearly double its data center investments in Mississippi as part of the tech giant’s strategy to spend $200 billion this year building out artificial intelligence networks.
The Seattle-based firm said it will invest another $12 billion to expand its existing campus in Madison County and build a new data center in Clinton. The move would boost Amazon’s total investment in the Magnolia State to $25 billion in projects expected to create 2,000 jobs.
The announcement comes as Amazon plans to outspend big tech rivals such as Microsoft, Meta and Google parent Alphabet in the global rush to expand AI networks.
Based on its first-quarter financial performance, Amazon Web Services, the firm’s cloud computing business, is expected to bring in $15 billion this year, Chief Executive Officer Andy Jassy said in his annual letter to shareholders on Thursday.
That number is “ascending rapidly” and could grow even faster as the firm builds more data center capacity to meet customer demand, he added.
“We’re not investing approximately $200 billion” this year “on a hunch,” Jassy said in the letter. “AI is a once-in-a-lifetime opportunity where the current growth is unprecedented, and the future growth even bigger.”
AWS added 3.9 gigawatts of new data center power capacity last year, and Jassy expects to double its total capacity by the end of 2027. Amazon is “monetizing that capacity as fast as it’s installed,” he added.
The firm already has commitments from customers for much of the data center capacity, and it expects to convert this year’s capex directly to revenue and profit over the next two years, Jassy said.
Mississippi hub
The massive investments from Amazon and other tech giants in recent years represent the largest economic development initiatives in Mississippi history, according to a statement from Republican Gov. Tate Reeves.
“Amazon isn’t just reinvesting in Mississippi; the company is once again betting on our people," Reeves said.
Amazon's new investment is part of a burst of data and energy campus development across the United States fueled by supercharged demand for artificial intelligence and cloud storage that is reshaping parts of rural America.
In addition to the planned AWS projects in Vicksburg and Clinton, Elon Musk’s xAI plans to build a $20 billion supercomputer facility, and developer Compass Datacenters has announced a $10 billion campus near Jackson.
Amazon said in its announcement that it plans to cover “all expenses for new energy infrastructure” and any upgrades to local power grids.
The company in early 2024 announced it will occupy two Madison County locations for massive data centers and has since unveiled locations in Ridgeland, Warren County and Clinton.
“At the end of the day, this collaboration translates to increased paychecks, expanded small business opportunities and a stronger tax base for generations,” Madison County Economic Development Authority CEO Joey Deason said in a statement.
Warehouses and drones
Meanwhile, on Amazon’s warehouse distribution front, the CEO said the firm will emphasize faster delivery on orders, with a goal of getting packages to customers in as little as 20 minutes in India and United Arab Emirates under the firm’s new Amazon Now service.
The e-commerce giant is starting to expand the service in the U.S. and Europe.
Prime Air, the firm’s drone delivery service, is expected to serve 30 million customers by year-end and to deliver half a billion packages by the end of this decade.
Amazon now has more than 1 million robots across its fulfillment and delivery centers to help pick, sort and transport orders, he added. The firm has developed a more streamlined, robot-assisted format at fulfillment centers designed for same-day delivery.
Amazon has built over 85 of the same-day fulfillment centers across the U.S. that will carry the firm’s most frequently ordered items; those properties have handled the delivery of more than 500 million same-day items this year, Jassy said.