An industrywide power crunch is changing how Amazon runs its e-commerce empire
Amazon is spreading e-commerce workloads across more AWS regions as power and capacity constraints reshape cloud computing in the AI era.
Amazon's vast e-commerce operations are undergoing a major transformation as power and data center capacity constraints become increasingly pressing. Internally known as "Region Flex," the multi-year initiative aims to decentralize Amazon's online retail infrastructure across more AWS cloud regions, reducing concentration in major hubs like Northern Virginia and Dublin, Ireland. This reconfiguration will enable Amazon to operate systems more flexibly, resiliently, and closer to customers.
The AI boom has driven an industry-wide scramble for power and computing capacity, outpacing the ability of companies to build capacity quickly enough to meet demand. Despite Amazon's expansion, adding more than 3.8 gigawatts of data center capacity in the past year, CEO Andy Jassy acknowledged last month that AWS still cannot build capacity fast enough to keep up with demand.
The internal documents reveal that power constraints have become a significant driver behind Region Flex. Amazon plans to reduce its footprint in Dublin by 40% through migrations and deprecations by 2025, and potentially move away from the region entirely by the end of 2026. Similarly, the company intends to divest from AWS regions in Northern Virginia and Oregon by 2029.
While distributing workloads across more regions offers flexibility, cost savings, and faster service delivery, it may also increase infrastructure costs by 10% to 15% in some cases. Even with this expansion, AWS anticipates ongoing capacity shortages, with CEO Jassy describing power as the "single biggest constraint" and projecting that demand will outstrip supply through 2027 and 2028.
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