Amazon has announced a significant investment in Germany, with plans to make the country the hub of its European cloud services. The US corporation is set to invest a substantial 8.8 billion euros into technology and another 1.2 billion euros into logistics and robotics. This investment will also create numerous new jobs.
The majority of this 10 billion euro investment will go towards Amazon’s cloud internet services, while a smaller portion will be allocated to expanding logistics, robotics, and establishing two new corporate headquarters, according to Amazon’s German headquarters in Munich. By the end of the year, Amazon aims to increase its German workforce to 40,000 permanent employees, up from around 36,000 in 2023. Globally, the company, founded in the summer of 1994, now employs more than 1.5 million people, with the majority still based in the USA.
Recently, in May, Amazon announced the creation of a new cloud for Europe called “AWS European Sovereign Cloud,” with an investment of 7.8 billion euros, with its first region to be based in Brandenburg. Consequently, Amazon has now set the total amount of planned investments in Germany at 17.8 billion euros.
Chancellor Olaf Scholz hailed the announcement as a strong signal for Germany. Amazon’s plans demonstrate that Germany remains a highly attractive investment location, enjoying the confidence of investors. “As the federal government, we are working precisely on this – the competitiveness of the location and the local investment conditions,” Scholz stated.
Of the newly announced ten billion euros, Amazon plans to spend 8.8 billion by 2026 in the Rhine-Main area to expand its cloud subsidiary, Amazon Web Services (AWS). AWS’s business model is based on providing server operation and IT services for corporate customers in its large data centres. According to company sources, the 8.8 billion euros will cover construction costs, data centre operations, and imports of machinery and software.
Cloud services as a growth area
According to the US market research firm Synergy Research Group, AWS maintained its position as the global market leader in cloud services in the first quarter of this year with a 31% market share, although it slightly lost ground to Microsoft’s Azure.
AWS expects the demand for cloud services to continue growing in Germany. “Germany is the heart of our pan-European innovations,” said Stefan Höchbauer, AWS’s head for Germany and Central Europe, in a statement.
Amazon is also expanding its online retail operations. In May, a new logistics centre was opened in Erfurt, and another is set to open in Horn-Bad Meinberg, North Rhine-Westphalia, later in the summer. A new logistics centre was also opened in Großenkneten, Lower Saxony, in August 2023. Additionally, two new corporate headquarters are being established in Munich and Berlin, consolidating Amazon’s employees from several smaller sites in each city. Since 2010, Amazon has invested more than 77 billion euros in Germany.