JAKARTA - Amazon's data center unit, Amazon Data Services, has officially acquired the George Washington University (GWU) Virginia Science and Technology campus for US$427 million or around Rp7.1 trillion. This acquisition is part of a massive expansion of infrastructure to support the development of artificial intelligence (AI).
The university announced the deal on Monday, March 2. The campus student newspaper reported that the deed of sale allows Amazon to build a data center or information technology facility at the site, which is in Ashburn, Virginia - an area known as one of the world's largest data centers.
Amazon has not provided an official comment on this transaction.
This step is in line with Amazon's long-term investment plan in the data center sector. In 2023, the company said it would invest 35 billion US dollars by 2040 to expand its data center in Virginia. This value adds to the 35 billion US dollars that the company has spent on the construction of data centers in the northern Virginia region during the period 2010 to 2020.
Corporate spending on technology companies has skyrocketed in recent years as demand for AI software, computer chips and other supporting infrastructure has increased.
Collectively, technology companies have committed to pouring at least $630 billion this year. However, some investors are beginning to worry about the potential for investment bubbles triggered by AI euphoria.
Meanwhile, the George Washington University said the deal gives the university the option to continue to run academic programs at the site for the next five years.
The Washington-based university called the sale of the campus "part of a broader strategy to strengthen GW's long-term financial health and invest more in its academic and community missions." However, this move has not completely resolved the structural deficit facing the institution.
Last year, GWU had taken various cost-saving measures, including termination of employment, restrictions on official travel, reduction of capital expenditures, and temporary cuts in the salaries of the university's leadership team. Management also admitted that the institution may still need to carry out further streamlining to address financial problems.
This acquisition confirms Amazon's aggressiveness in expanding AI infrastructure amid the fierce competition of the global technology industry, as well as reflecting the financial pressure faced by a number of higher education institutions in the United States.
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