Amazon Web Services Plans to Invest $35 Billion by 2040 to Expand Data Centres in Virginia

Amazon's cloud services division said Friday it plans to invest another $35 billion (roughly Rs. 2,83,400 crore) by 2040 to expand data centres in Virginia.

Amazon Web Services (AWS) said the new investment will create 1,000 jobs. Virginia Republican Governor Glenn Youngkin said AWS will establish multiple data centre campuses across Virginia.

In 2021, AWS said from 2011 to 2020 it had invested $35 billion (roughly Rs. 2,83,400 crore) in data centres located in northern Virginia and had 3,500 full time employees at its data centres in the state.

Pending approval by state lawmakers, Virginia is developing a new "Mega Data Center Incentive Program," which would allow the company to receive up to a 15-year extension of Data Center Sales and Use tax exemptions on equipment and software.

AWS also will be eligible to receive a state grant of up to $140 million (roughly Rs. 1133 crore) "for site and infrastructure improvements, workforce development, and other project-related costs."

Amazon shares closed up 3.8 percent Friday.

Amazon in 2018 after a long contest announced northern Virginia would be home to its second headquarters known as "HQ2" and eventually employ more than 25,000 employees. As of April, Amazon said its headcount assigned to the site was around 5,000.

Youngkin has faced some criticism for withdrawing from a competition to attract a new Ford Motor battery plant expected to be built with China's Contemporary Amperex Technology Co Ltd (CATL), the world's largest battery producer.

Youngkin defended his decision Friday, telling Bloomberg News that he looks "forward to bringing a great company there. It won't be one that uses kind of a Trojan-horse relationship with the Chinese Communist Party in order to gain."

A spokesperson for Youngkin has said that "while Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party."

Ford declined to comment on Youngkin's decision to withdraw.

In July, Ford said it plans to localize 40 GWh of battery capacity in North America starting in 2026. It also announced CATL would provide battery packs for Mustang Mach-E models for North America starting in 2023 and would discuss cooperation for batteries in Ford vehicles around the world.

"Our talks with CATL continue – and we have nothing new to announce on either front," Ford said.

Michigan is also a candidate for the Ford battery plant, sources said, and a decision could be made in the coming weeks.

© Thomson Reuters 2023