Science & Technology

Amazon Commits $9 Billion Investment in Singapore

Amazon.com intends to invest $9 billion in expanding its cloud computing infrastructure in Singapore.

Amazon Commits $9 Billion Investment in Singapore

Currently, the mentioned e-commerce giant, whose activities have already expanded beyond its original business, as a result of which this company, which also owns the best American delivery service, has become a major player in the technology sector, is interested in strengthening its presence in Southeast Asia. It is worth noting that this region is an object of interest for large international businesses. Southeast Asia is a space of commercial and technological opportunities. Foreign investments will contribute to strengthening the relevant potential of the region.

In 2020, Southeast Asia witnessed a highly intensive transition from offline to online activities. To a large extent, this tendency was due to the circumstances that formed during the coronavirus pandemic, which caused significant changes in consumer behavior. Against this background, the so-called new normality has emerged. The corresponding wording means an increase in the number of actions that are performed mainly in the virtual space.

The digital economy has scaled up significantly in recent years in Southeast Asia. The virtual economic system includes segments such as e-commerce, online payments, digital trading platforms, and other business activities on social networks. Some experts predict that by 2030, the volume of Southeast Asia’s digital economy will reach $1 trillion. The relevant information is contained in the e-Conomy SEA report, which was prepared by Google, Temasek, and Bain & Company.

Since 2016, the number of Internet users has doubled in countries such as Indonesia, Singapore, the Philippines, Malaysia, Vietnam and Thailand.

Amazon plans to invest 9 billion in Singapore over the next four years. This intention means doubling financial injections in this country by a subsidiary Amazon Web Services (AWS). The investments will be aimed at implementing actions aimed at meeting the growing demand of customers for cloud services and accelerating the introduction of artificial intelligence. The relevant information is contained in the official message of the company, which was made public on Tuesday, May 7.

AWS sells software and data storage for rent from massive server farms. In recent years, the company has stepped up efforts to expand its presence outside the United States. Most of the investments intended to implement the relevant intentions will be directed to Asian markets.

In the South-East Asian general market, there is an increase in the business of many large companies with a so-called international network of presence. The corresponding tendency applies, among other things, to such technology giants as Microsoft and Apple. Currently, the total population of Southeast Asian countries is more than 650 million people.

Amid rising tensions in the plane of geopolitical relations, many companies are seeking to diversify their activities outside of China. The aim of the business, as part of the relevant efforts, is to reduce the level of sanctions risks against the background of increased strain between Beijing and Washington. At the same time, large companies are interested in maintaining their presence in Asia, which is a wide-ranging market.

In total, since the beginning of the current year, AWS has announced intentions to invest about $35 billion outside the United States. In addition to Singapore, the company will also spend funds on scaling up and developing its operations in countries such as Japan, Mexico, and Saudi Arabia. Moreover, AWS is setting up clusters of data centers in Malaysia and Thailand.

Last month, Amazon released a forecast according to which AWS sales for 2024 will exceed the significant mark of $100 billion. It is worth noting that the achievement of the corresponding indicator in the case of the materialization of the mentioned expectations will happen for the first time in the history of the existence of the specified unit of the e-commerce giant.

AWS is the beneficiary of numerous corporate technology modernization projects. The high level of consumer demand for artificial intelligence services is also a factor with a positive impact on the financial results of activities of this unit of the e-commerce giant.

The announcement of the $9 billion investment was made during the AWS Asean Summit in Singapore. The central theme of this event was artificial intelligence. It is worth noting that it was in Singapore that AWS established its first data centers in Asia.

Investments worth $9 billion will generate a so-called ripple effect. This tendency is likely to cover the whole of Singapore with the acceleration of economic growth and the introduction of cloud technologies. The corresponding statement was made by AWS Country Manager Priscilla Chong.

Amazon predicts that its planned investments will support an average of 12,300 full-time equivalent jobs each year in Singapore’s local businesses. The company will also conduct workshops within two years in the framework of cooperation with the government of this country. It is expected that the relevant activities will help local small businesses gain skills in the effective use of generative artificial intelligence.

Singapore has already become a kind of hub for companies from the United States. Technology giants such as Google and Meta have already established their presence in this country. In the business community is also a widespread perception of Singapore as a kind of gateway to the wider broader of Southeast Asia, which has the potential for significant growth.

Last week, Microsoft announced significant investments in Asia. The chief executive officer of this company, Satya Nadella, stated several new investments and initiatives for Indonesia, Thailand and Malaysia. It is worth noting that Microsoft is AWS’s largest competitor in the cloud services area.

The company, headed by Satya Nadella, will invest $1.7 billion in Indonesia. These financial injections will be allocated in stages over the next four years. The investments are intended to build a new cloud infrastructure and artificial intelligence infrastructure. Also, part of these financial injections will be used to train 840,000 Indonesians and support the local developer community.

Microsoft will invest $2.2 billion in Malaysia. These financial injections are also intended for the development of cloud infrastructure and artificial intelligence infrastructure.

In Thailand, Microsoft will open its regional data center. Thai Prime Minister Srettha Thaivisin said that the implementation of the relevant initiative is fully consistent with the country’s desire to become the hub of the digital economy.

It is worth noting that Satya Nadella perceives artificial intelligence as an important catalyst for economic growth. In his opinion, AI is a source of significant prospects in the relevant context. Satya Nadella expects artificial intelligence to generate $1 trillion in profits for the Southeast Asian economy. Moreover, he has repeatedly stated the significant potential of this region.

The prospects for the digital development of Southeast Asia are significant. Significant progress has been recorded in this region in the context of the pace and scale of the introduction of advanced technologies. Some major cities in Southeast Asia are approaching the so-called digital saturation point.

The digital dimension of the overall economic system of the mentioned region will continue to be the main factor in the positive dynamic of the growth of the corresponding structure in the foreseeable future. It is also highly likely that the mentioned factor will be more significant than the gross domestic product.

The ecosystem, which includes governments, policymakers, businesses, and non-governmental organizations, is vital in the context of accelerating the implementation of the process of digital inclusion and digital participation. In this case, inclusion means providing access to technologies and the Internet. Participation means direct consumption of digital products and services.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.