Amazon plans to invest another €10 billion in its cloud and logistics investments in Germany, adding 4,000 new jobs.
TakeAway Points:
- Amazon plans to invest €10 billion in Germany, of which €8.8 billion would go towards AWS cloud infrastructure located in Frankfurt, by 2026.
- It is anticipated that the investment will boost Germany’s GDP by €15.4 billion and generate 4,000 new employment.
- With the help of Amazon Prime, Just Eat Takeaway.com offers fee-free delivery to Germany, Austria, and Spain.
Amazon plans Investment in Germany
Amazon.com Inc. has announced plans to invest an additional €10 billion ($10.7 billion) into its cloud infrastructure and logistics network in Germany. This investment aims to expand the company’s data centers and logistics capabilities in the region.
The latest plans include €8.8 billion to build and maintain its cloud infrastructure for the AWS cloud computing business in the Frankfurt region by 2026. This commitment is in addition to the company’s plans to spend €7.8 billion by 2040 to build a sovereign cloud business in the country.
The announcement was made during a meeting between Amazon’s Chief Executive Officer Andy Jassy and German Chancellor Olaf Scholz. Amazon has made several similar commitments globally this year, including a €15.7 billion investment in Spain through 2033 and €1.2 billion on infrastructure and computing in France.
AWS faces increasing competition from rivals like Microsoft Corp., which is also expanding its global footprint to meet the growing demand for data processing and storage driven by the boom in artificial intelligence programs.
European regulators are pushing cloud companies to store their data within the bloc to address privacy and security concerns. Amazon’s announcement in May was for spending to help build out a European sovereign cloud, which will be controlled exclusively by people inside the European Union.
Amazon to enhance job Creation
Amazon’s investment in Germany is expected to create 4,000 new jobs this year at three new fulfillment centers: one in Horn-Bad Meinberg (North Rhine-Westphalia), opening in late summer 2024, one in Erfurt (Thuringia), which opened in May 2024, and one in Großenkneten, which opened in August 2023.
By the end of this year, Amazon will have more than 40,000 permanent employees in Germany, providing roles of all kinds, at all levels, and in more than 100 German cities and municipalities across its business.
Since 2010, Amazon has invested more than €77 billion in Germany, contributing an estimated €50 billion to the gross domestic product (GDP). The company operates four R&D sites in Aachen, Berlin, Dresden, and Tübingen, where teams work on products and services for AWS, Amazon Music, Fire TV, Alexa, and fulfillment technologies. The research teams at the Development Centre in Berlin will benefit from the extension of labs to develop and enhance AI and robotics technologies.
“Amazon came to Germany over 25 years ago, and we continue to invest in the country. With our teams continually focused on innovation, we’re helping German customers transform the way they work, live, connect and thrive.” Rocco Bräuniger, Amazon Germany Country Manager, stated.
Infrastructure Expansion in the Amazon Cloud
AWS plans to invest €8.8 billion by 2026 to continue building, maintaining, and operating its cloud infrastructure for the AWS Europe (Frankfurt) Region, which has been based in the Frankfurt Rhein-Main area since 2014.
This investment will help meet growing customer demand for AWS technologies in Germany, including AI. According to a new AWS economic impact study, AWS’s investment plan is estimated to contribute €15.4 billion to Germany’s GDP over this period, while supporting an average of 15,200 full-time jobs annually in the local supply chain.
Stefan Hoechbauer, Managing Director for Germany and Europe at AWS, said, “Germany is at the heart of innovation across Europe. AWS is more committed than ever to helping German customers lead and build new technologies and services using the wide variety of capabilities in the AWS Cloud, including generative AI.”
Just Eat Takeaway.com
In a separate development, Just Eat Takeaway.com will allow Amazon.com Inc.’s Prime members to order takeout without a delivery fee in Germany, Austria, and Spain. This move is part of a mutually beneficial marketing push that gives Amazon users who pay for Prime membership early access to Just Eat’s fee-free delivery feature on orders above €15 ($16). The feature will eventually be available more widely for a fee to those who sign up for the takeaway company’s new customer loyalty program.
Just Eat’s Chief Executive Officer Jitse Groen said the company is focused on improving its offering to customers through deals, lower delivery fees, and loyalty programs. “Because that’s what we control,” he told Bloomberg TV. Just Eat has also expanded into adjacent segments such as grocery, health, and beauty through partnerships with companies like beauty retailer Lush Cosmetics Ltd., and UK grocers J Sainsbury Plc and Asda.
In May, Amazon increased its stake in Just Eat’s US unit, Grubhub. The deal allows US users to order Grubhub food for delivery directly on Amazon’s website and shopping app. It may ultimately enable Amazon to boost its holding in Grubhub to 18% based on the performance of the partnership.
