The official opening of the data centres comprising the United States cloud computing giant Amazon Web Services (AWS) region in New Zealand turned into political fisticuffs, after Prime Minister Christopher Luxon appeared to take credit for the large technology investment.
"We are going to build the most advanced small country on Earth and for that to happen, government, partnering with business, and with the community is how we're going to get that job done," Luxon said Tuesday morning, speaking at the Auckland launch of the AWS region.
“Well, I have to tell you, that has well and truly changed under this government, because we are open for business and we are obsessed with growth, growth, growth above everything. And we welcome investment to New Zealand because that's how we actually provide jobs for Kiwis, that's actually how we lift our incomes by supporting new businesses, and we invest in existing ones that are thirsty for new capital injections to leverage further growth," he added (quotes as provided to media).
Labour leader Chris Hipkins was quick to draw and fire back at Luxon, saying the Prime Minister's ego had again got ahead of him, by claiming sole credit for the AWS investment.
“In an embarrassing faux pas, Christopher Luxon is claiming a $7.5 billion investment in New Zealand as something he’s done, when in reality he’s had very little to do with it,” Hipkins said.
“He’s the FIGJAM Prime Minister. He spends so much time and energy claiming everything Labour did was wrong, now he’s claiming Labour’s achievements as his own," Hipkins added.
Readers who wish to enlighten themselves as to the meaning of the robust-language FIGJAM acronym, attributed to Brisbane rappers Butterfingers, may do so with the help of their preferred Internet search engine.
For the record, the AWS region was announced in 2021 with then-Prime Minster Jacinda Ardern travelling to the cloud provider's headquarters in Seattle for the occasion.
The headline figures that were quoted in 2021 and are still bandied about today include a total investment of $7.5 billion from AWS, and nearly $11 billion added to New Zealand's gross domestic product as a result of the region.
Some 1000 full-time jobs are dangled in front of the public as well, but how much actual new employment and money will be injected into New Zealand's economy isn't clear. Along with other tech firms, AWS which has 1.6 million employees worldwide, has cut jobs recently. Its chief executive Andy Jassy said generative artificial intelligence use would result in job reduction at the company.
Microsoft has also spent money on opening a cloud computing region in New Zealand which it hoped to do in 2023, but ended up launching in December 2024 instead.
AWS was gunning for a 2024 launch for its region, but ran into delays.
As recently as March last year, the completion date of the data centre region was looking uncertain, as Amazon was unable resolve a planning problem with storm and waste water disposal for its facility in West Auckland.
Building the largest tier of cloud infrastructure, often referred to as hyperscale, is a game in which only the biggest and richest tech companies such as AWS, Microsoft, Google, and Alibaba play in.
New Zealand is a late-comer to the big cloud provider party. Australia saw its first AWS region opening in Sydney in 2012, with a second launching in Melbourne a decade after.
There are several reasons for cloud providers building facilities in a particular country, including resilience, storing data in legally prescribed jurisdictions, and better performance through closer proximity to customers. AWS has bought 4.2 hectares of land by the Westgate development centre in West Auckland to build its region, which will feature local availability zones with three data centres that are geographically separated from each other.
Several New Zealand government departments, academical institutions and private companies have migrated to the cloud, either fully or partly; AWS also operates a partner programme, with tech companies such as Datacom and security vendor CyberCX providing cloud expertise to customers.
8 Comments
Do we have any idea of the volumetric water allocations granted for each of these facilities via their resource consents?
It's energy that is the major issue. Water gets commandeered, but nobody uses water up. Energy, on the other hand, is not only commandeered but dissipated; the 2nd Law applies.
And for no good long-term societal use - millions of stored pages and pictures of kittens, which nobody has the person-time to look through (I know a fellow with a record collection that would take more than his remaining lifetime, to play - same dilemma).
Doesn't do a thing for humanity's predicament.
I hope they're bringing a big UPS, backup generators and wind turbines/solar panels with them - lol
as for FIGJAM "we are obsessed with growth, growth, growth above everything" Luxon - for how many cents in the dollar is he prepared to sell NZ out to achieve his "obsession"?
Important to remember, AWS operates approximately 135 hyperscale data centers in more than 30 countries globally.
We are not special just because we have one of these data centers. It's good AWS is building here. But needs the right perspective. It's not the Olympics and Aotearoa punching above its weight.
they will crowd out locals and cream the profits off internationally - sooo how will their tax be calculated.....
Have worked for them before, they have more money than you could fathom and will do anything and everything possible to minimise tax in NZ to their advantage. Wouldn't be surprised if they throw weight like Tiwai smelter do in trying to get a cheap power deal in order 'to make the investment financially viable' or they'll simply threaten to bail. Movie studios have already shown precedent they can get tax relief form the govt if they throw threaten to film in other countries, Amazon wouldn't hesitate to do so either.
There may be some benefits to having them here, but if you see their track record they have harvested technology and data to automate as much as possible and strip out human employment. They employ staff globally, and can therefore outsource any digital functions needed for NZ operations to staff in cheaper countries, given NZ's high labour cost. Consider this: Amazon UK outright bought x2 Boeing 767's a decade ago to fly them back and forth between their biggest warehouse in Poland and the UK. This allowed them to offer free delivery in a reasonable timeframe to UK customers, and keep stock in the UK fulfillment centres for prime overnight deliveries only. They also used to have the likes of the DVD sales part of their business based in Jersey until the UK closed up tax loophole with this operation.
I know this sounds dramatic, but there's a reason they are as big and as profitable as they are.
There are some nuances around that, which I'll see if I can get a story written on.
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