The cloud services division of Amazon.com recently announced its plans to invest around $35 billion for the expansion of its data centers in the state of Virginia.
Considering how Amazon's AWS is among the top players in the cloud computing industry, this move will further strengthen Amazon's position in this sector. The said investment amount will be invested by 2040, which tells us that it will be one of the long-term plans for the company.
According to Amazon, this new investment plan will create around 1000 new jobs. The governor of Virginia state also announced AWS's ambition to roll out data center campuses in the state.
From 2011 to 2022, Amazon invested close to $35 billion in its data centers located across Virginia state. In addition, Amazon had 3500 employees working for it as of 2021.
The state of Virginia is planning to launch a new incentive program revolving around mega data centers. If it receives approval from the lawmakers, it will allow the companies operating in this sector to get tax exemptions and to receive a 15-year extension on sales.
In addition, Amazon's AWS will also become eligible to receive $140 million worth of state grants. This grant can be used for infrastructure improvements, the development of the workforce, and other project costs.
Following the good news, Amazon shares edged higher and gained 3.8% during the Friday trading session.
In 2018, Amazon announced that it would be choosing Virginia for its 2nd headquarters. Amazon also announced its plans to hire 25,000 employees.
According to recent data, Amazon has close to 5000 employees, which means there's a lot of potential for new job openings.
But if we look ahead, there are some significant problems that might hinder Amazon's plans. The biggest problem is a drop in sales growth due to high inflation and talks of recession. If 2023 turns out to be the year of recession, it will also have a significant effect on AWS's profitability.