AWS Invests $40 Billion in Chile for New Data Center Amid Environmental Concerns

Amazon Web Services (AWS), the cloud computing division of amazon, has announced a substantial investment of 40 billion dollars to establish its first data center and other cloud infrastructure in Chile. This project is anticipated to commence operations by the second half of 2026. The investment comes at a time when there is growing concern over the environmental impact of the increasing number of global data centers, particularly in regions like Chile, which is currently experiencing severe drought conditions.

This strategic move by AWS follows its previous expansions in Brazil and Mexico, marking the third cloud region in Latin America. The new cloud region in Chile will offer a range of cloud services, including computing power, storage, and databases, which are essential for modern businesses to operate efficiently. The data center is expected to provide strong computational capabilities for services such as generative artificial intelligence, enhancing AWS's presence and service offerings in the region.

The decision to build in Chile is likely driven by several factors. Chile's stable political environment and robust legal framework make it an attractive location for such investments. Additionally, the country's advanced telecommunications infrastructure and reliable power supply are crucial for the operation of data centers. Chile's strategic location in South America also allows for better connectivity and lower latency for users in the region, making it an ideal choice for AWS's expansion.

However, the project also raises concerns about the environmental impact of data centers. The construction and operation of data centers require significant amounts of energy and water, which can strain local resources. Chile's ongoing drought conditions add to these concerns, as the availability of water for cooling systems and other operations could be compromised. AWS has addressed these concerns by stating that its cloud region will use water for cooling servers only 4% of the time annually, equivalent to the water usage of 8 households over 15 years. The remaining time, the data center will use air and evaporation cooling techniques. Furthermore, AWS has committed to using 100% renewable energy for its operations since 2023.

AWS's investment in Chile is part of its broader strategy to expand its global footprint and meet the growing demand for cloud services. By establishing data centers in strategic locations, AWS can provide faster and more reliable services to its customers, while also reducing latency and improving performance. This expansion is expected to create new job opportunities in Chile and contribute to the local economy. Currently, AWS operates 36 regions and 114 availability zones globally, serving companies such as netflix, general electric, and Sony with storage, network, and remote security services. In Chile, local retailers, online retail giants, and mining companies have already begun utilizing AWS's regional services.

Despite recent reports of lower-than-expected quarterly cloud business revenue and income forecasts, AWS remains optimistic about the strong growth potential in Chile and the broader region. The company anticipates that the Chilean market will grow by 20.3% annually from now until 2028, with the market size expected to reach 19 billion dollars by 2025, up from 15 billion dollars in the previous year. This investment underscores AWS's commitment to expanding its cloud infrastructure and services, while also addressing the environmental challenges associated with data center operations.

Ask Aime: What is the impact of AWS' $40 billion investment in Chile on the local tech industry and potential environmental concerns?