Amazon to launch AWS region in Chile, investing $4 billion

SEATTLE - Amazon.com Inc. (NASDAQ: AMZN), the prominent broadline retail player with a market capitalization of $1.96 trillion and annual revenue of $650.31 billion, has announced its plan to open a new Amazon Web Services (AWS) infrastructure region in Chile by the end of 2026. According to InvestingPro analysis, Amazon currently trades slightly below its Fair Value, suggesting potential upside for investors. This move is set to bolster cloud services across Latin America, with a significant investment exceeding $4 billion directed towards the construction and maintenance of data centers in Chile.

The AWS South America (Chile) Region will comprise three Availability Zones at launch. This expansion is part of Amazon’s broader strategy, which includes 16 additional Availability Zones and five new AWS Regions in various global locations. With strong financial health metrics (rated GREAT by InvestingPro) and moderate debt levels, Amazon appears well-positioned to fund this expansion. InvestingPro subscribers have access to over 10 additional key insights about Amazon’s financial position and growth prospects.

Prasad Kalyanaraman, AWS Vice President of Infrastructure Services, emphasized that the new region will cater to the growing demand for cloud services, providing secure and efficient infrastructure. Advanced AWS technologies will be available to local organizations, fostering innovation and digital transformation.

Chile’s Minister of Science, Technology, Knowledge, and Innovation, Aisén Etcheverry Escudero, lauded the investment as a testament to Chile’s commitment to technology and innovation.

Amazon’s investment in Chile is not new; past initiatives include the launch of an Amazon CloudFront edge location in 2019, an AWS Ground Station antenna in 2021, and AWS Outposts to extend AWS infrastructure to local premises. Additionally, AWS Direct Connect and AWS Local Zones were established in 2023 to enhance connectivity and reduce latency for Chilean users.

The forthcoming AWS Region will be designed with sovereignty in mind, adhering to AWS’s longstanding architectural principles. It aims to support a wide range of customers, from startups to government institutions, enabling them to store data within Chile and access services with reduced latency.

In line with its commitment to sustainability, the AWS South America (Chile) Region will primarily use air-cooling, minimizing water usage in its cooling systems. Amazon’s broader goal is to achieve net-zero carbon by 2040 as part of The Climate Pledge. This environmental focus comes as the company maintains strong operational efficiency with an EBITDA of $126.14 billion and a return on invested capital of 15%. For detailed analysis of Amazon’s sustainability initiatives and financial performance, investors can access comprehensive Pro Research Reports available on InvestingPro.

To support cloud adoption growth in Latin America, Amazon has invested in educational initiatives, training over two million people in cloud skills since 2017, including more than 100,000 individuals in Chile.

This announcement is based on a press release statement from Amazon, detailing the company’s ongoing efforts to expand its global cloud infrastructure and contribute to technological advancements in Chile and Latin America.

In other recent news, Amazon.com’s first-quarter earnings for 2025 exceeded forecasts, showcasing strong revenue and earnings performance. However, there was a noted slowdown in the growth of Amazon Web Services (AWS), attributed to factors like enterprise sales cycle unpredictability and AI-related service capacity constraints. Meanwhile, Zoox, Amazon’s autonomous vehicle division, recalled 270 driverless vehicles following a collision in Las Vegas, with a software update being developed to prevent future incidents. Tigress Financial Partners has increased Amazon’s 12-month price target to $305, maintaining a Buy rating, citing the company’s strong e-commerce capabilities and AI innovations as key drivers. Similarly, DA Davidson reaffirmed a Buy rating with a $230 price target, despite AWS growth concerns. UBS also maintained a Buy rating but slightly adjusted the price target to $249, noting the potential for AWS growth acceleration in late 2025. These developments highlight a mix of positive financial performance and strategic challenges for Amazon, as analysts express confidence in its long-term prospects.

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