Microsoft and Amazon Web Services (AWS) have announced their plans to expand their cloud infrastructure with major investments in two key global regions, Europe and LATAM. Microsoft will increase its European data center capacity by 40% by the end of 2027, bringing its total to more than 200 data centers across 16 countries, with significant investments in countries like Poland. On the other side, AWS has announced an investment of over $4 billion to launch a new cloud region in Chile by the end of 2026. This will mark its third AWS region in Latin America with three new availability zones.
Both expansions are designed to bring advanced cloud and artificial intelligence (AI) services closer to customers, supporting local innovation, digital transformation, and economic growth.
Why Was This Needed
Microsoft’s expansion in Europe is driven by the continent’s tightening regulatory landscape, surging demand for data sovereignty, and the urgent need for future-proof digital infrastructure. With the EU enforcing strict laws like the GDPR and Digital Markets Act (DMA), local data storage and processing have become non-negotiable for businesses. Additionally, geopolitical tensions and supply-chain risks have amplified calls for resilient, region-specific cloud solutions.
The projected ~18.7% CAGR for Europe’s cloud market from 2023 to 2030 highlights the region’s strong economic potential, while the EU’s target of achieving ~75% cloud adoption by 2030 aligns closely with Microsoft’s aggressive investments to secure a leading position in this rapidly expanding market. By expanding locally, Microsoft not only ensures compliance but also positions itself as the go-to partner for enterprises navigating Europe’s complex tech regulations and AI-driven transformation.
On the other hand, AWS’s expansion into Chile is a strategic response to the region’s accelerating digital transformation and the urgent demand for localized, high-performance cloud infrastructure. Latin America’s cloud market, growing at ~15% annually, presents a lucrative opportunity, with Chile positioned as a critical hub due to its thriving sectors like banking, mining, and retail. The key industries are projected to drive Chile’s cloud market to ~$1.37 billion by the end of 2025.
Also, the expansion will provide a competitive edge to AWS, as rivals like Google Cloud and Oracle are already operating in Chile. AWS’s expansion prevents market share loss and positions it to dominate emerging demand for AI, IoT, and hybrid cloud solutions.
This move not only strengthens AWS’s foothold in a high-growth market but also ensures it remains indispensable to enterprises prioritizing speed, compliance, and scalability in Latin America’s digital economy.
Now What
These expansions by AWS and Microsoft are likely to intensify competition in the cloud market, accelerating further investments from other providers too. Development in the cloud infrastructure will drive advancements in AI, cybersecurity, and cloud-native solutions in the region. It is also expected that once the cloud adoption deepens, the players will further focus on responsible growth, environmental sustainability, and inclusive access to digital opportunities.