AWS to invest $13.2bn in Australian cloud infrastructure

Brandon How

Amazon Web Services is planning to invest $13.2 billion into its two Australian data centre regions over the next five years, as the federal government considers the need for greater regulation of the sector.

The investment, which is more than 30 per cent larger than its investment to date, is expected to support 11,000 jobs across by 2027, around 2,500 of which will be created through ‘direct effects’, including construction and operations jobs.

The remaining jobs will be created through indirect effects like “inter-industry and supply chain spending” and induced effects from “household income spending in the local economy”.

The announcement comes two weeks after Amazon said it would cut an additional 9,000 jobs across its global business, including in AWS. This is on top of the 18,000 jobs Amazon cut across its global business in January.

During Senate estimates earlier this year, the company confirmed it employed around 4,000 people through its cloud computing business.

Of the $13.2 billion investment announced on Tuesday, $11 billion will spent in the Sydney Region, with the remaining $2.2 billion invested in the newly launched Melbourne Region.

AWS launched the AWS Asia Pacific (Melbourne) Region — its second cloud infrastructure region in Australia — in January. At the time AWS said it expected to invest $6.8 million in the project between 2022 and 2037.

Around $730 million will be invested in network infrastructure with telco partners to extend AWS’ cloud and edge infrastructure to “facilitate high-speed fibre connectivity within and between our Availability Zones”.

The firm also wants to power all its operations, including data centres, with renewable energy by 2025.

Prime Minister Anthony Albanese welcomed the planned investment, noting that “digital transformation is integral to Australia’s future prosperity”.

“A whole-of-nation effort is required to ensure Australia and its citizens and businesses can be resilient, secure, and prosperous… Economic and infrastructure investment from cloud providers like AWS helps create jobs, advances digital skills, boosts innovation, and uplifts local communities and businesses,” the Prime Minister said.

Tech Council of Australia chief executive Kate Pounder described investments from Big Tech companies as having “an outsized positive impact on the wider economy”.

“Not only do they bring the direct financing and jobs, but their cloud infrastructure has also enabled the growth of a globally competitive Australian software sector, which has become one of the most successful new industries created in Australia in decades,” Ms Pounder said.

“The support for digital skilling also enables our workforce to learn from leading tech companies, with spillover benefits across the Australian economy.”

In an an internal AWS Australia Economic Impact Study released on Tuesday, AWS said the $13.2 billion investment would contribute $35 billion to Australia’s GDP.

Since launching its first Australian region in Sydney in 2012, AWS said it has invested $9.1 billion in Australia.

Options to increase regulation of big tech companies are being explored by the Senate in its inquiry into the Influence of International Digital Platforms. In submissions to the inquiry, both AWS and Microsoft dismissed the need for further regulation in Australia.

AWS said in its submission that the “cloud sector is already highly regulated” in Australia, citing the government’s Hosting Certification Framework and recent critical infrastructure reforms.

As the Albanese governments continues work on implementing its tax package to ensure multinational corporations pay a fair share in Australia, Assistant Minister for Competition, Charities, and Treasury Andrew Leigh singled out tech companies “in terms of how their tax affairs have been organised”.

Expanding requirements for storing more sets of data in data centres in Australia is also being considered, which Home Affairs secretary Mike Pezzullo says would support the domestic data storage and processing sector.

AWS alongside other big tech companies are opposed to data localisation, arguing that it does not by itself enhance the security of data.

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