Amazon.com Inc. AMZN disclosed its plan to invest billions of dollars in Taiwan over the next 15 years. The investment aims to establish data centers, further expanding the company’s global footprint in Asia to meet the region’s increasing demand for cloud services.
What Happened: Amazon Web Services, the cloud computing arm of the Seattle-based tech giant, revealed on Tuesday its intention to launch an AWS infrastructure region in Taiwan by early 2025, reported The Wall Street Journal.
“The new infrastructure will enable organizations to unlock the full potential of the cloud and build with AWS technologies like compute, storage, databases, analytics, machine learning and artificial intelligence,” said Prasad Kalyanaraman, vice president of infrastructure services at AWS.
This investment in Taiwan follows AWS’s recent plans to spend $9 billion on expanding its cloud services in Singapore and a $15 billion investment in Japan to build cloud capacity.
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Why It Matters: This move by Amazon comes at a time when the tech industry is witnessing a surge in cloud service demand. The company’s decision to expand its cloud infrastructure in Asia aligns with the region’s growing significance in the global tech landscape.
Earlier in the year, analysts predicted a strong outlook for Amazon, citing an accelerated sales cycle and a significant shift in fiscal 2024 budgets towards infrastructure expenditure, hinting at a quicker migration to AWS. This investment in Taiwan further solidifies Amazon’s position in the cloud computing market.
However, the move also comes amid rising geopolitical tensions. The Taiwan-China conflict has been identified as a “common risk” for tech giants like Amazon, highlighting the potential for a disruptive geopolitical event in China, which could impact access to crucial chip industries.
Amazon reported strong first-quarter earnings, including a 13% year-over-year increase in net sales, reaching $143.3 billion.
Price Action: Amazon.com Inc closed at $187.23, marking a slight increase of 0.091% on Tuesday. After hours, the stock dipped 0.0053%. Overall, Amazon’s stock has seen a significant uptrend year to date, rising by 24.88%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote