Amazon plots massive cloud expansion in Japan with $15B investment

Land of the rising profit?

Amazon Web Services (AWS) plans to invest 2.3 trillion yen ($15.5 billion) to extend its cloud empire in Japan.

The American cloud giant revealed its intentions during a press conference in Tokyo on Friday. The investment will be made over the next five years and drive the construction of several datacenters in the region. These will help to support the rapidly growing volume of data Amazon's network is handling, fueled in large part by the scramble to develop, train, and deploy AI models at scale, apparently.

"Our investment in cloud infrastructure generates a ripple across Japanese industries, including the public and government sector," AWS Japan President Tadao Nagasaki said. "It will help more Japanese organizations with the ability to access and adopt new, emerging, and transformational digital technologies, such as artificial intelligence and machine learning."

This, of course, isn't AWS's first expedition into the Japanese market. Between 2012 and 2022, Amazon has invested 1.51 trillion yen (about $10 billion) to build out two cloud regions in Tokyo and Osaka, the corporation said. Amazon hasn't clarified if the latest investment will see the expansion of its existing datacenters and/or the establishment of additional cloud regions within the country.

If we had to guess, the increased rate in spending over the next five years likely represents a heavier focus on costly GPUs and other AI accelerators.

AWS expects the build out will contribute about $37.8 billion to Japan's gross domestic product, which currently sits at about $4.9 trillion.

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Japan's digital minister Takuya Hirai touted the economic opportunities created by Amazon's planned build out. "The development of digital infrastructure in Japan is key to strengthening the country's industrial competitiveness, and datacenters play an important role to this end," he opined.

Amazon's Japanese adventure marks the cloud titan's latest large scale investment in the Asia Pacific region. Last spring, AWS announced it would invest 1.05 trillion rupees ($12.7 billion) to expand its presence in India.

Amazon isn't alone in seeing the value in the APAC area. Last March, Google announced its first datacenter facility in Japan, located in Inzai. Meanwhile, Microsoft has operated datacenters in Japan since 2014 and is also expanding. Redmond recently announced steep price hikes across much of Asia, with Japanese customers expected to see an increase of 20 percent across both cloud and on-prem offerings when they go into effect in April. ®

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