Elvira Pollina, Valentina Za and Supanta Mukherjee
MILAN/STOCKHOLM (Reuters) – Amazon’s AWS computing unit is in talks with Italy to invest billions of euros to expand its data center business in the country as part of the tech giant’s efforts to expand its cloud offering in Europe, four people familiar with the matter said.
Discussions between the parties over the size and location of the investment are ongoing, the people said, with one saying Amazon (NASDAQ:) Web Service (AWS) is considering expanding its current site in Milan or building a new one.
Both AWS and a spokesman for the Cabinet Office’s Digital Transition Department declined to comment. A spokesman for Italy’s Industry Ministry was not immediately available for comment.
AWS launched its first cloud region in Italy in 2020 as part of a plan to invest €2 billion ($2.2 billion) by 2029.
The company counts luxury car maker Ferrari (NYSE:) and insurer Assicurazioni Generali (BIT:) among its clients in the country, according to its website.
AWS recently announced a €15.7 billion investment in data centers in Spain’s northeastern Aragon region, replacing a previous 10-year plan announced in 2021 when the company committed €2.5 billion for the country.
AWS’ investment in Italy is in the billions but may not reach the scale of its plans in Spain, one of the people said. The announcement is not imminent.
In Germany, AWS plans to invest 7.8 billion euros until 2040.
AWS is also building the infrastructure to provide cloud services to telecom customers, which requires enormous resources.
The company signed on its first customer earlier this month when Telefonica (NYSE:) Deutschland announced plans to move 1 million customers to the AWS cloud.
Last year, AWS announced plans to store data on servers located in the European Union to protect data privacy for governments and customers in highly regulated industries.
Analysts and executives say many large enterprise customers have begun spending money on cloud computing again after a pause last year, as interest in artificial intelligence drives rebounding growth in the $270 billion cloud infrastructure market.
Alphabet (NASDAQ:), which struck a landmark deal in 2020 to supply cloud services to major Italian bank Intesa Sanpaolo (OTC:), has invested €1 billion in Italy to create two cloud regions that Intesa will rely on.
Microsoft (NASDAQ:) said a year ago it was launching its first cloud region in Italy as part of a $1.5 billion investment plan announced in 2020.
($1 = 0.9211 euro)