Amazon to invest €16bil in Germany in 2027, including in AI

On Tuesday, US tech behemoth Amazon disclosed plans to pour over €16 billion (US$18 billion) into Germany by the following year, with investments directed towards data centres and infrastructure crucial for the burgeoning artificial intelligence (AI) sector. This announcement took place at a business summit organized by the German government in Berlin, serving as a significant endorsement for Europe's largest economy, which is actively seeking fresh investments, particularly in high-tech domains.

David Zapolsky, Amazon's chief global affairs and legal officer, emphasized that the firm had already channeled over €100 billion into Germany since 2010. Economy Minister Katherina Reiche highlighted that Amazon's investments would bolster Germany's standing in the international technology competition while simultaneously creating jobs and value.

Out of the €16 billion planned, approximately €5 billion will be allocated towards expanding Amazon Web Services' cloud computing operations in the Frankfurt region, driven by the escalating demand for AI services. Some of these investments will also be directed towards Amazon Leo, a project aimed at providing high-speed internet via a network of satellites.

Amazon's warehouses will undergo upgrades, incorporating more robotics, and Amazon Prime is set to produce a series of new videos in Germany. The investment summit, which concluded on Tuesday, gathered over 200 corporate leaders from Germany and abroad. The government is striving to entice more companies to broaden their operations and revive the stagnant economy, despite frequent grievances over bureaucratic hurdles, exorbitant energy costs, and a scarcity of skilled labor.

Chancellor Friedrich Merz spoke at the event, disclosing that his coalition has embarked on the most ambitious reform and modernization effort in the past two decades. Merz outlined tax relief, bureaucracy reduction, and financial market enhancement as key goals. Earlier in the day, Reiche revealed during a radio interview that companies had pledged investments amounting to more than €220 billion at the summit thus far.

Merz inaugurated the event on Monday, engaging in an onstage dialogue with Jensen Huang, the CEO of AI chip giant Nvidia. Concurrently, Berlin announced a partnership with Nvidia to expedite the application of AI in industrial applications, a sector where Germany hopes to excel.