Amazon Web Services (AWS) has unveiled plans to invest £8bn in the UK over the next five years, focusing on developing, operating, and maintaining data centres nationwide. According to the Amazon subsidiary, the investment will contribute an estimated £14bn to the UK’s gross domestic product (GDP) by the end of 2028, in addition to supporting over 14,000 full-time equivalent jobs each year at local businesses across the country. AWS said that these new roles span various sectors, including construction, engineering, facility maintenance, telecommunications, and other services within its data centre supply chain.
The investment comes ahead of the UK International Investment Summit to be held on 14 October 2024. UK Chancellor of the Exchequer Rachel Reeves was quick to claim credit for the funding infusion for the new Labour government. “This £8bn Amazon Web Services investment marks the start of the economic revival and shows Britain is a place to do business,” said Reeves. “I welcome the announcement as part of the Government’s mission to boost growth, unlock investment and make every part of Britain better off.”
AWS invests, the CMA investigates
Since launching its first AWS Region in the UK in 2016, AWS has expanded its presence by operating three Availability Zones, two WaveLength Zones, two Edge Locations, and a Regional Edge Cache. Between 2020 and 2023, AWS claims to have invested more than £3bn in the country, supporting around 6,000 full-time jobs. The new capital will increase AWS’s total planned investment in the UK to over £11bn by 2028.
Cloud computing’s overall economic impact in the UK was significant in 2023, contributing more than £42bn, equivalent to 1.6% of GDP, according to an analysis by Telecom Advisory Services. It is also estimated that if the UK government supports half of small and medium-sized businesses (SMBs) to adopt cloud computing and artificial intelligence (AI), the government could generate nearly £38bn in additional value for the UK economy over the next five years.
AWS’s role in this national cloud computing ecosystem, however, is under investigation by the UK’s competition watchdog. Last year, the CMA initiated its own market probe into the country’s cloud computing market after media regulator Ofcom said there was evidence that the Amazon subsidiary, alongside hyperscaler competitors Microsoft Azure and Google Cloud, was engaged in anti-competitive practices. This included charging egress fees and the imposition of complex licensing structures that discouraged corporate customers from leaving their respective cloud ecosystems – findings that the CMA has partially supported in its preliminary findings.
This is the context by which AWS’s investment announcement should be judged, said Mark Boost, chief executive of one of the firm’s UK-based competitors, Civo.
“£8bn worth of investment in the UK’s digital infrastructure would normally deserve unequivocal celebration,” said Boost. “But we need to consider where the money is actually going. Expensive data centre infrastructure and AI hardware, [which] will be a significant amount of this investment, are not made and sold by UK companies… With the CMA due to publish its provisional findings on the UK cloud market by the end of October, the government should proceed with caution.”
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