Christopher Luxon hypes Amazon data centre opening

We already have a crisis in New Zealand….

….Just think of what the effects of this will be.

But, hey…it’ll provide a thousand jobs!

Christopher Luxon hypes Amazon data centre opening

Amazon Web Services has officially opened its new Auckland data centres, claiming the move will add 1000 jobs.

It has also announced an agreement with the Government to train more than 100,000 people on cloud computing, already more than half way to that goal.

The company unveiled the plans in 2021, saying the data centres would open in 2024 – but construction was halted in 2023. As of last December, the plan was to open the data centres this year.

In a statement on Tuesday, it confirmed it was still investing the $7.5b and would support an average of more than 1000 full-time equivalent jobs, adding $10.8b to the economy.

AWS country manager for New Zealand Manuel Bohnet confirmed the data centres were "live" as of on Tuesday. The location of the data centres remains secret for security reasons.

"They're in and around Auckland, so we have enough distance to withstand a scenario like flooding and power outage, but it's close enough for low latency," Bohnet said.

He confirmed the jobs created would be spread throughout the supply chain, and while that would include some roles for operating the data centres, it would also mean telecommunications engineers and other jobs to support the centres.

The announcement also included the launch of a new Asia Pacific (New Zealand) Region for its cloud services including analytics, networking, computing, cloud storage, generative AI and machine learning.

Having the services hosted locally speeds them up, and means New Zealand joins 37 other such "regions" in hosting cloud computing services. The company plans to expand further in future with data centres in Chile, Saudi Arabia, and Europe.

Questions about '100% renewable'

Building energy-hungry data centres is a boom industry in New Zealand, with international companies keen to reduce their climate impact by using this county's renewable electricity.

The International Energy Agency says data centres are on track to consume 4 percent of the world's electricity by 2026, and CDC, Microsoft, Amazon and other big players have expressed interest in building more of them here.

Bohnet said AWS had previously done a deal with Mercury so the data centres would be "100 percent renewable from day one", but facing questions from reporters confirmed they would be drawing from the local grid.

"Moving to the cloud gives you four times better efficiencies compared to an on-prem[ises] data centre. Also, we have our own custom-made silicon ... and the latest version uses 60 percent less energy," Bohnet said.

However, Bohnet refused to comment on exactly how much energy or what form of cooling the centres would use, or the timeline for the $7.5b investment.

The agreement with Mercury also meant the Tuatira South wind farm near Palmerston North was built at a larger scale, he said.

AWS' statement also said it had a Memorandum of Understanding with the government to train 100,000 people in New Zealand in cloud computing skills – and was already more than half way to that goal.

Bohnet said he would later outline a new initiative alongside IT training provider Lumify which would get the company another 10,000 closer to the 100,000 goal.

PM hails investment

Prime Minister Christopher Luxon also spoke at Tuesday's launch.

"We know that our firms, when they embrace more cloud based applications and services, are more productive and will make more money and be more profitable than those that don't," he said. "That's why our investment boost product is designed to help support those companies embracing more technology."

"We know that for our public service, there is a huge amount of work to be done to digitize government, and we've just kicked off that work, but we've got a lot more to do in that regard to make our public service behave as large service organisations with customers who happen to be the public of New Zealand."

He also pre-empted the announcement earlier in the day, telling Newstalk ZB the investment was the largest ever publicly announced tech investment in New Zealand.

Labour criticised the interview, saying Luxon was "claiming a $7.5 billion investment in New Zealand as something he's done".

Luxon pushed back on that.

"It's just that it's been launched live today and I was just drawing attention to the fact that it's a significant investment," he said.

"This has been coming for some time. I've been very upfront about that, but I'm just excited the fact that here is an example of what we want to see a lot of."

"The learning out of AWS is: man, it's more expensive to build in New Zealand. The Resource Management consent took a long time. It was very expensive, probably 20 percent more expensive than what they experienced in Australia... that's why we're changing our Resource Management planning acts."

The news followed the Government's announcement on Monday it would make an exemption to the foreign buyers ban for wealthy investors on the Active Investor Plus residency visa – also known as the "golden visa".

The visa required investors to spend $5m on high-risk investments in New Zealand over three years.

Those on the visa – who did not need to spend six months a year in New Zealand – could buy or build houses restricted to those worth $5m or more.

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