NEW DELHI: Amazon Web Services (AWS) is in talks with the Italian government about considerably expanding its data centre operations in the country, according to four people familiar with the situation. This move is part of AWS's broader goal to expand its cloud computing capabilities all over Europe.

The conversations are ongoing, and the specifics of the investment's magnitude and potential sites have yet to be determined.

AWS launched its first cloud region in Italy in 2020, with plans to invest €2 billion ($2.175 billion) by 2029. Its Italian clients include well-known firms like luxury manufacturer Ferrari and insurer Assicurazioni Generali.

This potential investment in Italy follows AWS's recent announcement of a €15.7 billion ($17.08 billion) data centre investment in Spain's Aragon region, which represents a significant increase from the €2.5 billion ($2.72 billion) plan announced in 2021. Despite the considerable volume of the Spanish investment, one source claimed that AWS's commitment in Italy might not be as large.

AWS has committed to investing €7.8 billion ($8.49 billion) in Germany by 2040. Furthermore, AWS is constructing infrastructure to serve telecom services, which require significant resources. Earlier this month, it signed its first telecom client, Telefonica Deutschland, with intentions to shift one million users to the AWS cloud.

Last year, AWS announced plans to house data on servers in the European Union to protect the privacy of governmental and regulated business clients. This initiative is part of a larger trend among major firms to recommence cloud computing spending, fuelled by a growing interest in artificial intelligence, which is reviving development in the $270 billion global cloud infrastructure market.

Competitors including Alphabet and Microsoft are also increasing their cloud footprints in Italy. Alphabet invested €1 billion ($1.09 billion) to construct cloud regions for Italy's largest bank, Intesa Sanpaolo, while Microsoft announced the establishment of its first cloud region in Italy as part of a $1.5 billion investment plan revealed in 2020.

As AWS continues to negotiate with Italy, the IT behemoth's actions reflect a deliberate push to strengthen its cloud service offerings across Europe, catering to rising demand driven by technical breakthroughs and the changing needs of enterprise customers.