Amazon (AMZN) has opened a new $11 billion data center complex in New Carlisle, Indiana. The site, called Project Rainier, is Amazon’s largest investment in AI infrastructure so far. The 1,200-acre facility is now running nearly 500,000 of Amazon’s Trainium2 chips and will grow to more than one million by the end of 2025.
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The center is built mainly to train and run models from Anthropic (PC:ANTPQ), the AI company in which Amazon has invested $8 billion. The project adds a major boost to AWS, as it works to meet rising demand for computing power used in AI products. It also comes one day before Amazon’s third-quarter earnings report, where investors will look closely at spending and returns in this area.
A Fast Build and a Big Bet on Chips
Project Rainier went from construction to operation in less than two years, showing how quickly Amazon can move large-scale projects. The complex now includes seven buildings and will expand to 30. Once complete, it will use 2.2 gigawatts of power, making it one of the biggest data center clusters in the United States.
The site uses Amazon’s own Trainium 2 chip instead of Nvidia (NVDA) graphics chips. Amazon says its chip offers 30% to 40% better price performance than standard GPU options. Although it is not as powerful for some AI tasks, it is designed to handle new types of models that use computing power more efficiently. By using its own hardware, Amazon aims to reduce costs and lessen its dependence on outside chip suppliers.
Rising Spending and Growing Competition
Amazon’s launch comes as tech giants race to build more data centers for AI. Research from McKinsey shows that companies may need to spend $5.2 trillion on data centers by 2030 to meet global demand. Amazon’s total capital spending is expected to reach $118 billion next year, much of it for AI and cloud expansion.
At the same time, Anthropic has grown quickly. The company now serves more than 300,000 business clients and has an annual revenue run rate of nearly $7 billion. It also works with Alphabet (GOOGL) (GOOG) , which recently agreed to supply Anthropic with up to one million of its tensor processing units. This means competition between the major cloud providers is likely to keep rising.
Local Concerns and Power Demand
The Indiana project has also drawn local concern. Some residents say the loss of farmland and higher electricity use have raised costs in nearby areas. Data from local reports show that electricity bills have climbed 267% over the past five years, and power demand in the region is expected to more than double by 2030.
Even so, Project Rainier shows how fast AI infrastructure is expanding. As companies like Amazon, Microsoft (MSFT), and Google continue to build large data centers, investors will watch how quickly this new wave of spending translates into profit growth for the cloud businesses that run them.
Is Amazon Stock a Buy, Sell, or Hold?
Amazon has the Street’s analysts’ backing, with a Strong Buy consensus. Out of 41 analyst ratings, 41 rate it a Buy. The average AMZN stock price target stands at $269.24, implying a 17.73% upside from the current price.
