Amazon has unveiled a new offering called AI Factories that allows large companies and government agencies to run Amazon’s artificial intelligence systems inside their own data centers. According to AWS, customers provide the physical facility and power, while AWS installs and manages the AI infrastructure and connects it to other cloud services when needed.
The product is designed for organisations that prioritise data sovereignty and want full control over their sensitive information without sending it to external cloud environments. With an on premises AI Factory, customers retain their data while still using advanced AI systems. They also avoid sharing hardware with external providers.
The name mirrors Nvidia’s own AI Factory brand for its hardware systems built for large scale AI computing. Amazon’s new product is a collaboration between AWS and Nvidia. The systems will use a mix of technologies from both companies. Customers can choose between Nvidia’s Blackwell GPUs or Amazon’s Trainium3 chips. The platform also includes AWS networking, storage, databases and security tools. It integrates with Amazon Bedrock for AI model management and AWS SageMaker for training and development.
Other cloud majors are also moving in this direction. Earlier, Microsoft revealed that it was deploying Nvidia powered AI Factories across its global data centers to support AI workloads. Microsoft later outlined plans for more localised data centers to address data sovereignty needs. These offerings also include Azure Local, which lets customers run managed Microsoft hardware within their own facilities.
The trend highlights a shift in the cloud industry. As demand grows for advanced AI systems alongside strict control of sensitive data, major providers are once again investing in private data center solutions and hybrid cloud models.
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