Amazon to invest $4.4 billion in New Zealand data centres

Amazon has formally launched cloud services in New Zealand and dusted off a plan first announced in 2021 to invest more than NZ$7.5 billion ($4.4 billion) in data centers in the South Pacific nation.

Amazon Web Services will establish the AWS Asia Pacific (New Zealand) Region to “help serve the growing demand for cloud services across the country and empower organizations of all sizes to accelerate their digital transformation,” Amazon said in a statement Tuesday in Wellington. 

The construction, operation and maintenance of data centers in New Zealand would support more than 1,000 full-time jobs a year and add an estimated NZ$10.8 billion to New Zealand’s gross domestic product, Amazon said. A timeline for the investment wasn’t disclosed.

New Zealand is looking to attract more foreign investment to kick start a sluggish economy that slumped into a deep recession last year and has struggled to establish any momentum since. The government has reformed planning laws to speed up consents for new projects and adjusted visa settings to entice offshore investors and entrepreneurs.

Prime Minister Christopher Luxon, who attended a launch event in Auckland Tuesday, said Amazon reported it was 20% more expensive to build in New Zealand than Australia, and that was why planning laws needed to change.

Local media reported that the company executives and advisers at the launch event declined to specify their plans, including locations of any data centers.

The new region gives existing customers such as Xero and Kiwibank “a home-grown option to run workloads, store data locally, and deliver digital services with even lower latency,” which will allow them to develop new cloud-based products faster, Amazon said in the statement.

Luxon acknowledged the investment plan was first announced nearly four years ago, but said today was the live launch and it was a significant investment for the country. 

“It’s been over a number of years, I’m not disputing that,” he told reporters. “I’m celebrating the fact that we’ve got a big international investor here in New Zealand. That’s what we want to see a lot more of and it’s consistent with the focus of this government, which is to welcome investment in this country because it drives jobs.”