Amazon to spend $7.8B to expand data operations in central Ohio
Amazon is poised to make the second-largest private sector investment in state history, announcing Monday that it will spend an estimated $7.8 billion over the next six years to build data center operations in central Ohio.
Only Intel's $20-billion investment to build two semiconductor factories in New Albany is bigger.
For Amazon, the move marks a major expansion of its data center service business that dates to 2015 when it announced its initial data centers for the region.
"Ohio became a very attractive place for us place back then. It's even more attractive today as we continue to operate there and build out data centers," said Shannon Kellogg, Amazon's vice president of public policy. "It’s a great place to do business."
Sites for the data centers not chosen
Amazon did not say how many data centers it will build, or where they will be built, as part of this expansion. A single data center can cost at least several hundred million dollars.
Amazon says it is considering numerous locations. The Dispatch reported in January that Amazon bought nearly 400 acres along Beech Road NW near the Intel site in New Albany for $116.6 million. It has not released any plans for the site.
Amazon now operates seven data centers in central Ohio, three each in New Albany and Hilliard and one in Dublin, according to Baxtel.com, a site that tracks data center development.
What will the data centers do?
Amazon's data centers will include servers, data storage drives, networking equipment, and other forms of technology infrastructure used to power the continued growth of cloud computing where businesses and public institutions use networks of remote services hosted on the internet to store, manage and process data.
"Demand for cloud services continue to be very high," driven by machine learning and artificial intelligence, Kellogg said.
"Everything is shifting to the cloud," he said.
The data center investments are in addition to warehouses and delivery stations Amazon operates throughout Ohio. Amazon is also is among the biggest developers of solar farms in the state.
Amazon says it employs 37,000 workers and operates 70 facilities in the state ranging from warehouses to 12 Whole Foods stores, 17 solar farms and one wind farm that will generate enough electricity to power 620,000 homes. An Amazon movie, "Phat Tuesday," was filmed in the state.
The company pegs its total investment in the state at more than $20 billion since 2010.
The latest investment would more than double the $6.3 billion Amazon has invested in its data center operations since 2015. Those investments to date support an average of more than 3,500 full-time equivalent jobs annually.
Despite their expense, data centers create few jobs. Amazon's new projects are expected to create several hundred direct jobs while supporting thousands of additional jobs at local businesses through the construction, operations and maintenance.
"Businesses are looking at leveraging cloud computing more than ever before," Kellogg said. "Public sector institutions are too."
Amazon's data centers kicked off central Ohio tech rush
Amazon's first data centers in Ohio date to 2015, when it announced plans in New Albany.
Amazon's initial data center in central Ohio kicked off a tech rush that has been followed by Facebook and Google, and now Microsoft, which recently purchased land just south of Amazon's land along Beech Road that could become a data center site.
More: Columbus among nation's top 10 data center regions, report shows
Affordable land, low-cost electricity, available labor and a favorable climate with little risk of flooding, earthquakes or tornadoes has made central Ohio an attractive spot for data centers.
To date, Amazon Web Services investments and operations have generated over $2 billion in benefit for Ohio, and supported more than 3,000 local secondary jobs on an average annual basis, according to the state. In 2022, Amazon Web Services directly employed nearly 1,000 Ohioans.
Ohio's local and state economic development partners, including JobsOhio and One Columbus, are collaborating on the expansion.
"Amazon is already one of the largest private-sector employers in Ohio, and the company's continued growth here further cements Ohio as the heart of our nation's technology and innovation," Gov. Mike DeWine said in a statement. "As more of the world relies on cloud computing, this investment will build on Amazon's current infrastructure in Ohio to help new and existing businesses grow, allow residents to securely connect to friends and family, and provide access to online educational resources and entertainment."
mawilliams@dispatch.com
@BizMarkWilliams
This article originally appeared on The Columbus Dispatch: Where will Amazon spend $7.8 billion in central Ohio?
