Amazon (AMZN) has announced plans to invest up to $50 billion to expand artificial intelligence (AI) and supercomputer capacity for the U.S. government.
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The investment by Amazon is one of the largest cloud infrastructure commitments targeted at the American public sector. The project is expected to break ground in 2026 and add nearly 1.3 gigawatts of new AI and high-performance computing capacity for U.S. government clients.
Amazon said that the additional AI and supercomputer capacity will be targeted across AWS Top Secret, AWS Secret, and AWS GovCloud segments of its business through new data centers that are equipped with advanced computing and networking systems.
Amazon’s Government Business
One gigawatt of computing power is enough to power about 750,000 U.S. households on average, according to industry data. Amazon has a growing government business and receives more than $10 billion a year from its cloud-computing contracts with various governments within and outside the U.S.
Amazon Web Services (AWS), the company’s cloud business, is already a major cloud provider to the U.S. government, serving more than 11,000 government agencies nationwide. “This investment removes the technology barriers that have held government back,” said AWS CEO Matt Garman in a news release.
Is AMZN Stock a Buy?
AMZN stock has a consensus Strong Buy rating among 43 Wall Street analysts. That rating is based on 40 Buy and three Hold recommendations assigned in the last three months. The average AMZN price target of $294.71 implies 31.01% upside from current levels.
